50+ Positive Catalysts on Bitcoin's Horizon by Murad Mahmudov
On Saturday, at the Baltic Honeybadger conference in Riga, Latvia, Murad Mahmudov, the head of investments at crypto hedge fund Adaptive Capital, shared more than 50 catalysts that, according to him, are tailwinds for Bitcoin's growth, adoption, and price appreciation.
According to Mahmudov, the most critical factors that are helping Bitcoin are deteriorating trust in critical social institutions such as government, media, and banks, increasing global debt and income disparity levels due to current fiscal policy, the growing strength and development of the Bitcoin network, increasing Bitcoin knowledge and awareness, as well as certain design aspects engrained in the Bitcoin network.
"If inflation, state surveillance, geopolitical tensions, commercial banks and negative interest rates make fiat currency holders suffer, there will likely be an increasing incentive towars buying and holding bitcoin," Mahmudov stressed.
Here is the entire list of 50 forces and trends accelerating Bitcoin's adoption as presented and explained by Murad Mahmudov:
- Global trust in government institutions, banks, and mass media companies is at multi-decade lows.
- Studies show that trust between people (interpersonal trust) is eroding and is near all-time lows, too.
- Trust between nations is diminishing, too.
- Global debt levels are at all-time highs, and up 50% up since the global financial crisis of 2008.
- If you add unfunded liabilities, and other "off-the-books" government obligations (social security, healthcare obligations, etc.) to the debt number, the picture is even worse.
- USD 15 trillion in negative-yielding debt around the world.
- Meantime, global central banks are in rate-cutting frenzy at the moment, as negative rates are going deeper into the negative zone.
- Normalization of Modern Monetary Theory and other economic schools of thought advocating for "unorthodox" monetary policy.
- Wealth inequality in the English-speaking world is at 100-year highs, and near multi-decade highs in other countries and a growing number of people are realizing that fiat money, central banking, and easy monetary policies may have had something to do with it.
- Wealth and income inequality is one of the factors fueling the rise of populist leaders and politicians around the globe, both on the right and the left.
- Populist and radical politicians are more likely to both sharply increase and reduce taxation, engage in aggressive monetary policies or confiscating assets, and bitcoin gives the 1% an asset that is far more resilient to seizure by the 99%.
- Central banks' demand for gold is at multidecade highs.
- While still the biggest share, the dollar's share of global currency reserve is slowly declining.
- The era of bank secrecy is coming to an end as Switzerland and other traditional private banking havens start sharing account data with tax authorities of dozens of other countries.
- Mass-surveillance, both financial and non-financial, is on the rapid rise.
- Attempts to ban the usage of cash are on the rise.
- Sanctions and weaponization of large international settlement networks around the world.
- Bitcoin is slowly starting to be increasingly frequently mentioned next to the term "safe haven." (However, Mahmudov believes it still will take some time until Bitcoin becomes a real safe haven).
- Demographics. The non-tech savvy older generations are gradually passing while the tech-savvy younger generations become adults.
- Internet penetration continues to grow steadily around the world.
- Smartphone penetration continues to grow globally.
- The proportion of time that people are spending online continues to grow.
- Continued financialization of Bitcoin, as slowly and steadily, bitcoin is starting to appeal to traditional investors.
- Bitcoin core and layer 1 improvements are steadily improving regardless of the bitcoin price action.
- The development of various Bitcoin layer 2 technologies continues.
- Numerous Lightning Network improvements and features are in the works (Submarine Swaps, Atomic Swaps, Dual-funded channels, Sphinx, Neutrino, Eltoo, etc.).
- The entire ecosystem of Lightning-related infrastructure, products, and services are expanding.
- Bitcoin hash rate, or the computing power of the network, has hit new all-time highs last week.
- The Bitcoin hash rate distribution is improving.
- Existing Bitcoin privacy solutions are being improved and new solutions are being developed.
- Bitcoin custody solution improvements.
- The growing number of non-monetary Bitcoin use-cases.
- More and more people are simply coming to the realization that Bitcoin is superior to previous money products across the majority of dimensions.
- Bitcoin infrastructure and everything around it is growing very rapidly.
Bitcoin memes are growing strong.
- Growth in Bitcoin literature.
- Growth in Bitcoin educational courses.
- The rising number of Bitcoin-only entrepreneurs and businesses.
- More and more traditional finance and global macro people are slowly joining in recommending BTC as a part of one's portfolio.
- Bitcoin stock-to-flow ratio. Since bitcoins are going to be increasingly more difficult to produce, their limited supply and growing demand are meant to produce higher price valuation.
- Global bitcoin penetration in terms of capital still remains small relative to the total addressable market. Bitcoin is still super young, especially in terms of the percentage of the global monetary base.
- Superior Bitcoin Sharpe ratio. Bitcoin has been giving a significantly higher risk-adjusted return compared with other major asset classes.
- Uncorrelated nature. Bitcoin is extremely uncorrelated to other asset classes.
- Better than any remittance solution, especially when it comes to international transfers to sanctioned or other disadvantaged regions.
- Destruction of the ICOs and altcoins. It's much better for the newcomers in the space when they can choose from fewer digital assets as they enter the crypto market.
- A steady reduction in Bitcoin volatility, as it is one of the most important things if bitcoins are to be treated as money.
- Onchain metrics: dormancy. On-chain analytics show that large BTC holders aren't selling their holdings nor moving their coins despite the price movements.
- The number of addresses holding 1, 0.1 or 0.01 BTC are steadily growing.
- BTC realized price just reached all-time highs last month and continues to have a very sharp upward momentum.
- Log-log analysis which uses logarithmic price and logarithmic time shows that bitcoin price will keep on growing, albeit at a slower rate but with less volatility.
- Bitcoin price has had higher monthly price lows every month this year, except for February, and this trend is likely to continue in the future.
- Bitcoin's self-reinforcing effects. Bitcoin's design contains many loops that are feeding it to make it increasingly stronger.