This is the first of a thought leadership series on the future of money, cryptocurrency, and finance.
Johnny McCamley is the Founder at CryptoClear and a Crypto Asset Portfolio Manager.
1. What is driving the current crypto boom?
A few things: Fear- FOMO- Fear of Missing Out- as those who do not own bitcoin and other Crypto Assets are now experiencing FOMO, as they are saying to themselves have I “missed the boat?” and they start investing as soon as they can. For those concerned about this, remember the Crypto Asset market is still in it’s infancy and around 1% of what it will be in the future- so now is still great time to invest- for the long term. Adoption is also driving the price rises – more of the likes of Tesla and MicroStrategy purchasing bitcoin- this is a domino effect- the floodgates are starting to open. ETF’s currently being approved for bitcoin (and Ethereum) in Canada and the US will be the next catalyst.
Shortage of bitcoin on the exchanges is another issue, this is driving up demand as there is lack of supply. It’s the simple economics of supply and demand. Bitcoin halving, which occurs roughly every 4 years, will only add to this shortage as every ‘halving’ the amount of BTC coming into circulation is cut in half (the size of the blocks is reduced by 50%).
Coinbase Direct listings are also crucial. Lots of investors are “sleeping” on the importance of the Coinbase Direct listing. Investors who have never touched Crypto Assets before will see a $80 Billion+ company and consider it as an investment for their portfolio, which is likelt to lead them to investing in Crypto Assets themselves.
2. Which crypto currency will become the most widely used and why?
I think it will be XRP- the XRPL and XRP token is perfectly suited to “bridge” Central Bank Digital Currencies (CBDC’s) that will replace cash in the future. A bridge is needed between these CBDC’s as they will all have their own unique features on their own private blockchains and will need to be interoperable (work with each other)- XRP will provide this interoperability by acting as a bridge between the various CBDC’s. XRP is 1 of 10 Crypto Assets I invest in on a weekly basis.
3. What will be the biggest impact of decentralised finance/crypto upon our current financial system?
The biggest for DeFi will be banking the unbanked- those in 3rd world developing countries that must travel 2 hours to get to a bank and then find out that they don’t have the right shoes to get into the bank (yes, the right shoes) can now access high yield interest saving accounts, insurance, credit and much more from a $80 android phone.
The biggest impact Crypto will have on our current financial system is already occurring. Banks, hedge funds and the world at large is starting to wake up and see the clear opportunity that an investment in the top 1% of Crypto Assets can and will provide. Crypto will lead to a wealth shift. Of course, there are many uses/impacts that DeFi and Crypto will have on our current financial system that no one can even fathom yet, it really is exciting times ahead to be investing in Crypto projects that are changing and will change the world for the better.