Cryptocurrencies have now gained mainstream attention, the next step will be to see whether or not they can attract mainstream use. However deep your Bitcoin analysis went in 2017, it’s impossible to ignore the meteoric price rises that brought this asset and cryptocurrencies in general into the wider consciousness.
But, it’s impossible to ignore that there is still some resistance to this. Questions abound such as: Are cryptocurrencies safe? Will prices always be as volatile as they have been in recent months? Are they even currencies or should we see them as an asset like traditional commodities?
Resistance has also come from the ‘old order’, with central banks and politicians caught out by the arrival of a disruptive new technology that threatens to change the way we spend money.
That resistance will be broken by two things: consumer demand and adoption by influential figures.
That might come from retailers accepting payments (with Amazon the ultimate ‘prize’) or investors signaling their intent.
A key example of the latter came recently when the Rockefeller family’s venture capital company (Venrock) announced it would be entering into a partnership with CoinFund to help entrepreneurs to launch businesses powered by blockchain. This cryptocurrency investment fund is helping to drive forward research in a whole host of projects related to this technology.
The attachment of the name Rockefeller to this sector is, of course, culturally significant, especially in America where the family’s name and reputation has a definite cache. This is a case of ‘old money and new tech’ coming together in a way that is bound to make others want to follow suit. It’s not an isolated case either, with the likes of George Soros also weighing up crypto investments.
The nature of the investment is also significant too. Venrock’s money will help others to capitalise on the benefits of blockchain, the technology that underpins cryptocurrencies that looks set to have far-reaching uses far beyond this sector. This money isn’t going into one asset, it’s helping to ensure investment into the cryptocurrency sector as a whole.
Venrock partner David Pakman said: “We wanted to partner with this team that has been making investments and actually helping to architect a number of different crypto economies and crypto token-based projects.”
This tells us that there’s confidence in the sector – but also that there’s still innovation to come. New cryptocurrencies, new platforms and new infrastructure – such as Bitcoin ATMs – that are yet to be released will be the key to driving greater adoption of cryptocurrencies. The sorts of pioneering startups promoted by the likes of CoinFund face the challenge of picking up the baton and continuing the progress already seen in the growth of cryptocurrencies. The Rockefeller investment is telling in that it offers a reminder that, in this sector, the best is yet to come, with rich potential to be tapped into.
There’s plenty of scope for fellow investors here too. While not everyone has access to funds as deep as the Rockefeller family, the existence of cryptocurrency investment funds mean that people who share confidence in this sector can choose to put their money into this asset in a way that helps to foster and drive on growth.
The innovation race will be hotly contested, with rich rewards up for grabs for those who can cater for the demand from consumers – the sort of rewards that could be lucrative for a cryptocurrency investment fund.
If 2017 was the year in which cryptocurrencies came into the mainstream spotlight, 2018 looks set to be a year when they begin to mature – with investors showing confidence in both the asset and, more importantly, the technology that underpins this. The story of cryptocurrencies is far from over. We’re barely at the end of the beginning.
