The growing disinterest in the traditional economy
I was reading that 1 in 5 Australians see crypto as an easier way to invest for a house deposit than traditional options. This is not just for the young, this is in total. It is to be expected, e3specially since the housing market in Australia has boomed and priced out most people who aren't already in, aren't already well established or, aren't able to get parental support for the deposit - which is many.
One of the reasons that it is harder to get people into crypto in Finland for example, is that on average, they are doing okay financially, they don't need to take "unnecessary" risks on their investments. Crypto is attractive to the disenfranchised, not those who are mid-range comfortable and happy with their lot in life. Of course, this is a generalization, but it is also why a lot of the early people into crypto were not the investors, it was the people who are tired of the government control - which is a different kind of disenfranchisement.
In Australia it is the same, where it is the people who haven't currently got a position in the housing market that sees crypto as an investment opportunity, not the people who are already in, even though those in have more disposable income and a more stable position from which to invest. The risk is lower when the money used isn't needed to pay bills or save to put a roof over the head one day.
Now that crypto is becoming more mainstream, the average investor is going to invest as the risk/reward model becomes too attractive to ignore. This could mean that for something like Bitcoin, that is already in the minds of the market, will be bought by those who can afford to move in and not require a ludicrous return to get adequate results.
If you consider that the average house price in Sydney is around 1.1 million dollars (850K USD) and a 20% deposit required, it is still going to take a significant investment and therefore risk into Bitcoin, to get there anytime soon. However, small amounts with a little diversity and a bit of luck consistently invested, could see many people take a decent chunk out of their deposit needs. The willingness to take the risk is testament to how bad the investment markets are for many people and banks are offering a losing amount of interest once adjusted for inflation, so they aren't an option.
However, I also suspect that some of the people who have got into the overpriced housing markets recently, are also looking at servicing their debt using crypto. Instead of needing it to get the deposit, they are finding ways to get into a loan and then taking the risk that their investments over time will be significant enough to be able to meet monthly debt demand.
In some ways, I have taken this approach too as a contingency. For example, while my wife and I can comfortably service our loan now and even if interest rates increase a fair bit, if that happens, with inflation attached for living costs, one or both of us losing our jobs and I lose my business, crypto will hopefully be able to offer some respite to close gaps, if needed.
As I have said earlier, I am looking for "lifechanging" results from crypto and if everything goes to hell, lifechanging is being able to hold ground without being swept out to sea. Selling now or even at the recent high would be low-grade lifechanging, but would still leave us in a relatively risky position, though less so.
But, if looking at the potential of the crypto industry over the next decade, this model changes significantly, the challenge is making it to that point with a stack still intact. For lots of people now and in the expanding future, crypto is going to be more than an investment hedge, it is going to be an income stream that will increasingly be used as a supplementary income. For those who are currently managing but have little extra to invest, crypto could offer them some current higher risk exposure, but with increasing stability and regularity of return. DeFi pooling is a good example of this, where people can make regular claims and have immediate access to value, that can be ever more conveniently used.
With what I consider is going to become a more challenging work environment, this additional income is not only going to be important for individuals, it is going to be 9nivaluable for local communities and even governments. Depending on how the economy fares going forward, part of the drive of adoption could actually come from governments encouraging usage, as they will be increasingly unable to satisfy the needs of their citizens - especially in the smaller countries that are at the mercy and under the control of the large economies.
El Salvador is a potential frontrunner in this area, where they are going to try to generate and attract wealth into their country, risking more freedom for their people in the hope that they will use the value to improve the local economy. The large economies have very little incentive to do so, as they can use their size to their advantage instead. It is going to be an interesting one to keep an eye on.
Regardless of what the establishment or the comfortable investors think about the future of crypto, the future is going to be increasingly driven by the young, which due to the conditions they have and will inherit, must find new ways to generate wealth for themselves. This means that not only will they be motivated, they will also have the technological knowhow and, will increasingly take positions in the government, potentially changing the culture of control. While this hasn't happened that much in the past, the speed of technological knowhow and spread of information has never been as fast as it is now either.
Governments will always move slower than the people they govern though, because they operate in a much narrower range of conditions, whereas people live in the full range of experience. This is why the majority of users who came into Hive are probably not the most financially successful in the traditional economy. However, there are also plenty of those who are as well, who recognize the opportunity for themselves through the creation of a better economy.
At the end of the day, we all act on incentive and currently, there is little incentive for the majority of people to invest into the traditional economy, as it is a place where wealth attracts wealth and most of the wealth is already held in hands that never needs sell, so it just keeps safely attracting more. However, the crypto market doesn't interest most of that group yet as they are already comfortable and safe, so there is opportunity to get in and because of the nature of the industry, there can always be opportunity, as when any particular asset gets too controlled and restricted, people will abandon it in favor of another. This puts the emphasis on sustainability of assets, where healthy distribution is key to attracting usage.
It seems a fair way off, but the future always does seem a long way away until it arrives and then, people look back and wonder at how fast it all happened. I was in my early 20s when the dotcom bubble burst, but it doesn't seem that long ago. Consider all of the development the internet has gone through since then and that I have a little over 20 years left til official retirement, what will happen in the next decade to come?
I suspect a lot of disruption at every layer of society and the constitution of the economy is going to change dramatically. It may not matter much for those who already hold value, but for those who don't, it might be the opportunity they need to get a foot in the door by building a new economy, grow roots and the foundation they need on which to build a home.
[ Gen1: Hive ]
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