Investors are constantly reminded that despite the countless coins, projects, and innovations in cryptocurrency, bitcoin may be the only “safe” cryptocurrency to buy. However, it comes with a big asterisk. Bitcoin’s price is down more than 60% year-to-date, and volatility remains a key feature of the asset. However, most importantly, how to value it is still a mystery to many – many investors are looking at negative returns and the cryptocurrency has not convinced people of its potential as an inflation hedge this year. While many have dismissed bitcoin’s original vision as a digital cash — largely due to volatility — some investors and developers still believe in its potential to improve financial transactions. “Similarly, spot comedies were the form of the future in 1999,” said Mike Brock, who heads Block’s TBD business. “It was still full of foam and steam pots and nonsense speculation. We’re seeing the same thing here, and a lot of people are getting hurt.” Up to this point, investors who have been stuck in the cryptocurrency market since the recent FTX explosion are focusing on the utility cryptocurrency can provide rather than how speculative assets can ride the wave during hype periods. Payments are one way to use bitcoin. “Trading and leveraging is not exactly a first-rate financial problem,” said Lyn Alden, founder of macro-focused firm Lyn Alden Investment Strategy. “The bigger problem in general is that a lot of people globally don’t have access to savings, they don’t have access to good payments. That’s a bigger general addressable market and that’s essentially what bitcoin and stablecoins are going to solve.” Brock added that the bubble in the market “is still unrelated to the long-term success of these technologies. At a fundamental level, they unlock value and will provide greater capital efficiency in the markets in the future.” Block has said little about TBD, which focuses on cryptocurrency and decentralized finance, as CEO Jack Dorsey announced the idea in the summer of 2021. TBD is focused on building a cross-border money transfer product instead of putting energy into building another cryptocurrency exchange. Broca. Investors laughed after Tesla announced in 2021 that it would accept bitcoin from customers as payment for its electric cars, only to reverse the decision shortly after as the cryptocurrency’s prices plummeted. And while Tesla didn’t give credit for reversing the volatility, many observers saw it as evidence of misdirected confidence in bitcoin’s payment capabilities. According to Brock, the price change of Bitcoin is insignificant. “The price of bitcoin on any given day – as a means of transferring money – has no effect on us,” he said. “Whether the price is $500 or $100,000, the system works the same.” “Bitcoin has a huge premium today, which is largely driven by speculation,” he said. “I think the long-term value of bitcoin will increase due to increased utility on the network, as it is increasingly used to power things like international money transfers. [and] Bitcoin has a stable supply cap of 21 million coins. Cautious investors may not buy bitcoin’s big bottom yet. Instead, they can move on. their assets. Global demand When Russia waged its first war against Ukraine earlier this year, observers and crypto-currency skeptics glimpsed bitcoin’s potential to serve people. The official financial system can’t or won’t. Many are turning to crypto to protect their cash. Ukraine also has banks It’s received a lot of payments and donations made in cryptocurrency amid news of its run and empty ATMs. “It’s not buying coffee from Starbucks, so it might not relate to your average American, but it’s a real use case,” he said. Brock is not alone in his belief in bitcoin’s payment potential. The group that manages the payment protocol built on the Lightning Network. The Bitcoin network makes Bitcoin network payments faster, cheaper, and easier to verify than transactions made directly on the Bitcoin blockchain. Strike, which has a bitcoin trading service, also develops remittances, micropayments, tip and payment merchants, and bitcoin peer-to-peer services. At the AfroBitcoin conference earlier this month, Strike announced a partnership with Bitnob, a company that aims to use Bitcoin’s Lightning Network to improve remittance payments to Africa. “It’s really strange that people are rejecting this feature of Bitcoin,” said Alex Gladstein, senior strategist at the Human Rights Foundation. “The ability to send value from one place to another is one of its most important features, and it’s something that’s coming up in a really, really big way around the world.” “The current international financial system is permissive, closed, exclusionary and often colonial,” he added. “Users from country A can very rarely talk to users from country B very easily. There are many fees for transferring money around the world. Often places like Africa, for example, 80% of all inter-African flows go through. American or European company.” Bitcoin also It has been a lifeline for other groups marginalized or underserved by financial institutions, such as sex workers, Lebanese freelancers struggling with hyperinflation and unable to access bank accounts, and Afghans suffering from a nationwide cash shortage.Unlike consumer payments, one called Stacks the company is so optimistic about Bitcoin’s transactional capabilities that it is building a smart contract layer on Bitcoin for DeFi, NFTs and other decentralized applications Tyrone Ross Jr., president and founder of US-based financial planning firm 401 Financial ., investors saw bitcoin as an absolute store of value whatever they know, he’s top of mind in crypto infrastructure plays like TBD initiatives on the Block. According to him, paying for everything with bitcoin in the United States is unwise because transactions are taxed, but Bitcoin fulfills the needs of people who are excluded from the formal financial system. Ross called it an “uncontroversial use case” and said cryptocurrency has so far been “clouded” by online casino culture. The Federal Reserve’s Economic Welfare of US Households report released this spring lends some strength to the argument. It found that low-income adults (those with an annual income of less than $25,000) are more likely to use cryptocurrencies for transactional purposes than investing. Cryptocurrency investors, on the other hand, “were disproportionately high-income, almost always had traditional banking relationships, and typically had other retirement savings.” 46% had an income of $100,000 or more. Zooming in, 11% of adults in 2021 said they held cryptocurrency as an investment, and 2% said they used cryptocurrency to buy or pay for something in the previous 12 months. Another 1% said they use cryptocurrency to send money to friends or family. According to Oppenheimer analyst Owen Lau, it’s a small pocket of the US that uses bitcoin for payments, but Bitcoin doesn’t need 100% of the global population on the network to succeed. “If 5% of the population believes that a currency or a price will rise, it will inevitably exist,” he said. “The market price is determined by the marginal investment, not by the initial investment. So if you still have a small sector that likes it as a class, there are still people trading bitcoin.” Brock said he believes bitcoin will be seen as a safe harbor “around the world” as it benefits from remittances and as a hedge against inflation (“obviously not today”). This does not mean that people will replace the dollar in their daily lives. In fact, discussing probability is another way many investors miss the point, he said. “Will bitcoin be the way you pay for your Starbucks coffee next year, five years from now, 10 years from now? Probably not,” he said. “My belief that bitcoin can create a better financial system does not depend on the failure of the dollar.”