Stephan Pair, CEO of BitPay, has stated that a very large aspect of the price of Bitcoin comes from the speculation of investors concerning the adoption of blockchain technology and the usage of the currency in the nearest future. In an interview with Squawk Box on CNBC, Pair said since speculative practices of investors on bitcoin’s future usage plays a significant role in determining its current value, it is a bit more difficult to determine the driving price of the currency.
The U.S. based BitPay is a global bitcoin payment processor that allows online merchants to process crypto payments from their customers. The Bitpay head honcho stated in the interview:
“A very big component of the price is certainly speculation. It’s investors speculating on the future usage and adoption of this technology. A small component of the price is actual utility, and that’s what BitPay is focused on — using the platform and delivering products to our customers that they find valuable.”
Level of Crypto Adoption
The BitPay Chief was also quizzed on his personal views concerning the level of adoption that cryptocurrency and the blockchain technology, has gotten so far. A little under a year ago, when Bitcoin hit its all-time high value of $20,000, there were signs that the mass adoption of cryptocurrency was edging even closer than was expected.
However, since then, and with the subsequent drop in the currency’s value, a calmer perspective has been the consensus, and analysts have also gotten realistic with their time frames, figures like five to ten years are now being pushed around for mainstream adoption.
Pair echoed the same sentiments, saying are closer to the attainment of mass adoption than we think.
“I used to say 10 years, but now I think it’s more like 3-5 years until you can go into a restaurant, a retail establishment, and just everybody’s going to expect that that store will be able to accept a blockchain payment.”
Cryptocurrencies have seen more adoption by businesses in the past year. However, with the current state of the market, it is also possible for the level of adoption to fizzle out, as cryptocurrencies continue to lose their value, thereby making them even less efficient as both investment vehicles and means of payment.
Adoption has always been one of the challenges of the crypto industry, with many believing that the goal is not just to get digital assets to increase in value but to encourage businesses to integrate them into their operations. In some way the problem is self-inflicted; one of the main driving forces of mass adoption is clear regulation, and the current undecided stance of major crypto markets like the United States and Britain on how to regulate the sector is not helping matters.
Pair’s sentiment is shared by a few other notable crypto figures, with Anthony Pompliano stating that the bear market has caused a mass exodus of the “tourist investors” who put money into crypto without actually having an understanding of how the technology works.
Still, it is incredibly difficult to determine whether this current bear market is another cycle in the history of the crypto market, or whether the market has been able to achieve stability already. Bobby Lee is of the belief that the former is the case, even though investors will prefer the latter scenario. In a tweet shared with his followers, the Co-founder of Hong Kong-based crypto exchange BTCChina said:
“If history repeats perfectly, then the current bear market for #Bitcoin would bottom out at $2,500 next month, in Jan 2019. And then the next rally would start in late 2020, peak out in Dec 2021 at $333,000, and then crash back down to $41,000 in Jan 2023. Something like that?”