The takes of crypto just being hijacked by institutions is false

At this point making statements like “bitcoin is being hijacked by institutions” is really delusional for several reasons.

One, the so-called institutions have always been in crypto.

Two, there's a huge difference between investing in crypto and what's going on lately with bitcoin ETF.

If we look at the numbers, it is rather obvious that crypto users are not all fuckin middle class and definitely not lower class citizens. Of a surety, we could see the user count up there in millions, but the value inflow cannot be attributed to this population.

So who then could be investing?

We are going to be looking at some hard numbers that when tested against one another would point us to what should have already been obvious, but first, a quick question: how much have VCs invested in crypto in the last couple of years?

VC funding in crypto accounted for about $33 Billion in 2022, this plummeted to about $10 billion in 2023 based on publicly available data.

Surely, I expect these numbers to be much higher if all could actually be accounted for, publicly.

That said, everybody knows that being part of a VC ain't cheap so that's definitely not a middle class market, meaning that whatever crypto sector these funds may have flowed into has been an “institution controlled” sector.

Institutions are humans too, alienating them when it comes to crypto is weird, does one stop to think what sets of individuals can build the best alternatives to the banking system?

Surely it takes being a close friend to someone to be the best foe.

Crypto Has Never Been Controlled By The Middle Class(Retail)

Retail buyers are never long term investors, so if they never are, who then controls the markets? Or to better frame that question: who's poised to benefit the most from where crypto is headed?

That's right, the institutional investors. The wealthy few, you can't beat the money because even the tech is funded by the money.

The May 2021 crypto crash was reported to have been caused by “retail” investors.

So if retail sold for a couple of billions in profit, spread across a large number of people, who was buying? And still holding to this point?

If we are to trust public data, the middle class income in the US is estimated to be $55,001 to $89,744 according to fool.com and it's estimated that American household spend an average of $61,334 per year on expenses, how much money does this leave for investing? Nothing for some and about $28,000 for others.

Who's gonna bet that majority will prefer saving than jumping on some volatile asset that could have been created by a scammer in Nigeria?

Where am I heading with this?

In a minute now.

Research shows that most Americans, about 75% based on this report - are not confident in the safety and reliability of crypto, so that definitely means it's not a viable investment product for them.

Within the same research, there's evidence that upper class citizens report being invested more than middle and lower class.

If we can't trust that data, we can use some hard user count data to draw an estimate for ourselves, this is why we talked about the middle class income and cost of living in the first place.

According to triple A, about 46 million Americans are invested in crypto. So if all 46 were middle class, who've allocated, say 20%, which is about $5.6k based on outstanding income after expenses from data above(and we haven't even considered taxes), crypto would attract under $300 billion of inflow.

Now, it's obvious that such inflow could push the industry's market cap to interesting places, say for example the 2021 pump kind of places.

But this can't be true. The middle class is definitely not all investing 20% of nada in Crypto, Some can't afford to and this is just when we focus on the USA. And if that population is coming in, who are they buying from? And when they exit like in May 2021, who are they selling to?

If crypto was in fact run by the middle class investing thousands of dollars on average, the markets would be far larger than it is right now and far more stable because that's a long list of low volume trades spread across.

The industry has always been mixed. Institutions have always existed. Just like the rest of us, they seek to make money but most of the time, they play the game better.

The difference here is that with products like Bitcoin ETFs, we are looking at the centralization of crypto held by retail investors.

Posted Using InLeo Alpha