Good People, there is a possible evolution in the world of market systems where cryptocurrencies could disintermediate the elemental structure of investing, especially for stocks and bonds. Yes, why take risks investing in companies which can miss revenue and profit targets when there is an “asset” you can just put that money with no stress on checking production output. Yes, bitcoin and cousins do not have to report quarterly results unlike companies which do, and have to justify why we must keep investing in them.
If Bitcoin hits $100,000, we could have a consequential impact in the market. Yes, it can attract capital that is not to be deployed in any production system, but largely helps some people make tons of money. Within that system, why should people work – and why should people create companies?
The success of bitcoin and cryptos will change many things, including how investors deploy their capital. Already, America has positioned itself for a big win via the ETF products.
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Yes, just like that, America was against it even though it was REALLY into it with companies like Coinbase being allowed to go public in the United States.
Left and right, it is coming as expected: only the government will make Bitcoin great, and since the anointing via ETFs, the veil has been removed, and no person can predict what will happen next. I expect a new US neobank with focus on cryptos within the next 24 months.
Very apt …
The way to metaphorically visualise the bitcoin phenomenon in line with your context is a bimodal distribution or inverted bell curve.
At one end(input), a lot of energy is used or invested to mine or produce a coin, and at the other end (output), a lot of lazy… pic.twitter.com/tMjyfoKhSE
— Hunter Henshaw (@2_henshaw) March 11, 2024
Great point. You hit all the areas. It is not a currency but an asset people can invest in. But when so many people have money in it, politicians will begin to fear that if it crashes, retirement accounts, tied to ETFS, will be affected. This thing will change many things!
Comment on Feed: I’ve seen this play out on a small scale and can’t imagine the disruption this would cause in the allocation of capital to productive ventures on the global stage. A case in point was during the heyday of MMM in Nigeria when people closed their shops and invested in MMM. The goal was to ‘wait for 30 days and get your big return.’ The economy suffered. Crypto would help the world when it becomes stable and accepted as currency rather than an investment class of asset. Thanks, Prof, for pointing us to the impending danger.
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The key thing is to understand wealth distribution or holders, if it does not tilt so much towards speculators, then things will balance themselves out in the long run.
There are people who will never put money in betting or gambling, not because they are afraid of losing money or based on religious beliefs, but rather because they do not consider it to be an ethical way of making more money. Expect same on cryptos, some will never put money there, simply because they do not like the idea of growing money without working for it.
Some companies don’t command high valuations, but the critical role they play in the global economy, the ones with greater valuation cannot match; so we need the diversity both in companies and investors, for proper functioning of the economy.