The meaningful shift from Bitcoin maximalism to Bitcoin realism

There was a time when all cryptocurrencies traded against Bitcoin (BTC). Speculators ventured into other coins when they saw assuring tokenomics or promising hype, but Bitcoin was their settlement coin of choice.

Things have changed. Stablecoins now constitute a critical $150 billion pillar in the cryptocurrency market. Perpetual futures over-amplify market sentiment and, more often than not, dominate price action. Much more capital, including from institutional funds, has come into the market lately with only a moderate impact on Bitcoin’s price. So, some former bulls now dismiss Bitcoin as boring.

Is this the end of Bitcoin maximalism? Probably not. But, perhaps, it’s time for more realism.

Anyone coming into the crypto space for the first time because a funny dog or pixelated primate presented itself as a hyper-sound asset is going to need time as well — A lot of it. But, the end result isn’t necessarily Bitcoin maximalism.

Being a core holding, though, most participants in the space have some exposure to Bitcoin already. Just looking at the game theory playing out across emerging markets and in the context of the current sanctions regime, as well as inflation, most investors in digital assets know it’s good to hold “some Bitcoin.”

Too toxic?

Some say Bitcoin maximalists are toxic. But, people are toxic everywhere. And, what maximalists in Bitcoin do a good job of is reiterating first principles, which helps anchor the conversation. Their motto is, Bitcoin doesn’t need you, you need Bitcoin. True? Well, true or not, the point is: Don’t put your life savings in a memecoin because the community is so nice to you.

Let’s be real. The world is dealing with currency debasements, Bitcoin mining can and does serve environmental goals, the United States and its allies did freeze Russian foreign reserves, the future is profoundly digital, inflation is not transitory and holding Bitcoin in the context of any of these makes complete sense.

Bear markets show what projects and protocols are really made of. Axie Infinity’s Smooth Love Potion (SLP) token currently trades around 40-times lower than its all-time high. Bitcoin is at about 2-times lower than its all-time high. Breaching $69,000 sooner rather than later would not be unreasonable or even out of the ordinary.

Finally, banks “getting into Bitcoin” is somewhat of an oxymoron and some might argue Bitcoin needs none of that, but it’s equally realistic to say that Bitcoin’s integration with global finance and existing infrastructure makes the asset more resilient, as it brings in more stakeholders who will be invested long term.

No one needs to be a Bitcoin maximalist, but everyone should be a realist.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Ben Caselin is the head of research and strategy at AAX, the crypto exchange to be powered by London Stock Exchange Group’s LSEG Technology. With a background in creative arts, social research and fintech, Ben develops insights into Bitcoin and decentralized finance and provides strategic direction at AAX. He is also a working member of Global Digital Finance (GDF), a leading industry body dedicated to driving the acceleration and adoption of digital finance forward.