For people to be "pushed" into cryptocurrency they need to encounter a situation where they want to do a financial transaction and their usual payment systems don't work. How likely do you think that is?
The fact is, if you hold your savings in USD in a bank account with close to zero interest rates, your life savings will be worth less every single year (purchasing power, not dollar amount). With a deflationary currency such as gold or bitcoin, that is not the case. I think as people realize this, it will eventually become a self fulfilling prophecy where people are pushed into cryptocurrencies as a hedge against hyperinflation (it is already happening in certain countries such as Venezuela).
It stands to throw off the entire balance of power in the world which is why people in high places are trying to slow it down and prevent it from happening, but I believe it is just putting off the inevitable. That is why I am saying it wont happen today. I said 10 to 20 years as an aggressive estimate, but in reality it could take 50 to 100 years.
I also believe the entire surge in Bitcoin and crypto and subsequent crash may have been orchestrated by big players in order to shake the public’s confidence and trust in these markets to push adoption farther down the road.
The difference between the USD and BTC isn't that one loses value every single year and the other doesn't. It's that one is actively managed to ensure it retains ~98% of its purchasing power over the course of the year and the other isn't.
That 2% fall really isn't such a huge deal for people that want instant access to the only money their creditors are required to accept, the only money they can pay their taxes in and the only money that's widely accepted elsewhere. (Other assets might actually gain purchasing power more often than not, but can also fall relative to that impending tax bill)
Most of the world's wealth is stored in assets which are not money or bank accounts anyway. And if people want to hold all their savings in something with a better return than their bank account, then bonds and stocks have been around, fungible and convertible to cash via apps for a very long time and payment app-ized versions of those are a far more plausible alternative to traditional banking for the average person than intrinsically worthless cryptographic signatures "mined" in China and shilled for on forums. The only thing unique about cryptocurrency as an economic asset is that it has no legal tender status and zero income stream, rights or assets attached to it. There might have been people orchestrating surges and crashes, but that's pretty much the best case scenario for assets which people have no reason to value at all.
Yes, Bitcoin has lost a lot of value since Christmas, but it is still up around 600% from last year. I am taking a long term view here. It is unfair to criticize Bitcoin’s decline because in terms of an asset class it is still miniscule. I consider it in the early price discovery days. Amazon stock declined from $107 to $7 around 2000-2001 so you could make the same argument that buying Amazon was a bad investment then, but you would look pretty dumb today. For reference, just last year, Bitcoin’s market cap was around $15 billion. That would be the equivalent of buying Amazon at around $32 based on the current price.
The Bitcoin volatility will stabilize over time, and I think it will become a legitimate asset class. I would like to ask you in response to
> There might have been people orchestrating surges and crashes, but that's pretty much the best case scenario for assets which people have no reason to value at all.
Why would you say that fiat currencies have value (other than because the government says so)?
This is a good question. Two reasons. Firstly there are many people who must obtain dollars in future to repay debts (all new dollars are created as someone's debt) or to pay taxes of around a quarter of GDP per annum. Secondly, central banks actively intervene to decrease supply when purchasing power drops faster than they desire. Since people need dollars, others will be able to purchase things they sell with dollars.
Bitcoins on the other hand are created permanently, and BTC-denominated future repayment obligations are tiny in relation to supply. Since virtually nobody needs Bitcoin there is little reason other than optimism for value to remain above zero, never mind increase over time.
AMZN was not the only stock to drop in 2000-1. Enron also dropped. Bitcoin does not have the properties of AMZN (a legal claim of a share of ownership of a business which has since become very successul indeed) but does have similar properties to those of Enron share certificates after the company was wound up (people have spent money acquiring them, their authenticity is verifiable and they cannot be duplicated, but they grant no claim on any tangible assets or income stream and thus are only worth what some Enron-certificate-enthusiast is willing to pay for them)
Using the boogeyman of hyperinflation is also rather dishonest, as that takes much, much more to happen than just the 2% inflation target the Fed has.
A more reasonable benchmark might be the S&P 500.