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2022 Prediction #5: Institutional Crypto Adoption

People had cheered about institutional adoption of crypto in 2021. Rethink again. Does institutional adoption really help crypto communities or are they making another stock market that will be rigged or turning Defi into another bank?

TL;DR

Institutional adoption of crypto means regulations and market manipulation. Pouring unlimited resources into the market to influence the direction is what Wall Street has been practiced of their power to influence the stock market. The Crypto market has a different agenda for the future.

Here is a 1 min summary of the article if you want to skip the reading.

Why Adoption

Institutional adoption will not make crypto a better place but brings it back to the existing financial system. The traditional system plays on the squid game-like environment and big corporations buy up potential companies and the stock market is hottest as ever to attract investors to join the earning event. Only the party may end with the financial crisis that no one can predict and the people who have money will be able to get away with the market crash but it will leave every other small investor in limbo.

What Is Institutional Adoption

Institutional investors are seeking another viable investment since the existing investment vehicle has broken. The market has been more volatile ever since. Institutional investors want a way to consistently make profits like in previous years. Cryptocurrencies become their investment vehicle to generate profits. Only the problem is they cannot influence crypto similar to the stock market they did in the past. They are hesitant to get involved.

Year of Adoption

From Mark Cuban to many individual investors, 2021 was a year of rug pull. Million dollars were scammed. Mark Cuban even called for regulations on Defi which regulators now paid more attention to. Squid Game token is another scam that rug pulled people with millions of dollars.

Companies Adoption

MicroStrategy, Tesla, Square, Coinbase, and many other companies obtain Bitcoin in record years. They are slowly obtaining more and more Bitcoin into their spreadsheet and making it their permanent reserve.

Check out my article 2022 Prediction #4: Regulated Defi On-Chain KYC

Countries Adoption

El Salvador made Bitcoin their legal tender. Since then, there are more countries rumoring to join El Salvador to adopt the Bitcoin standard.

Bitcoin ETFs

Investment products also adopt Bitcoin as one of many options to attract more buyers and investors into their products.

Adoption Is Bad

Institutional adoptions will make individual investors behind. 10% Bitcoin has been controlled by the institutional investors and there will be more to join. It will not make Bitcoin evolve into a more open-source of money for everyone to participate but it will make Bitcoin an exclusive investment tool and service to the rich. As the Bitcoin Dominiation Rate falls back below 40% and its illiquidity rate is about 76%, cryptocurrencies did not design to be held and controlled rather than distributed to everyone to use and everyone has a chance to own some.

In Conclusion

Institutional adoption is not a viable route to cryptocurrencies. Likely the Bitcoin will fall out of number 1 and be replaced by future cryptocurrencies. At least, 2022 is a route for more institutional adoption to come.

Stay tuned for the 2022 Prediction #6: Defi Insurance


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