Is the scaling issue going to break the major barrier to the traditional investment market to plunge into the Bitcoin space?
Most enthusiasts would hope so as there has been the narrative that a resolution of the scalability of Bitcoin is what mainstream investors have been waiting for.
If that truly is the case, then could we be in for a huge splash into the combined market of the global stock and bond markets worth over $100 tln?
Take note that is if it can get a tiny fraction as some views show online - a meager one percent of the market share could push the total cap to $1 tln (10x its current cap of about $100 bln).
There is no doubt that the Bitcoin market capitalization is already huge even without the scaling issue getting to this point.
Also, it is becoming general knowledge now that Bitcoin has to succeed for all other alternative currencies to have a shot at their existence, due to the multiplier effect the top currency usually have on them when it hits a swing.
Added to this is the view that the Bitcoin adoption problem seems to rest on getting more traditional investors on board, particularly how it needs to appeal to those at the lower ebb so that it can get support at the top.
A major effort in that direction is the implementation of the Lightning Network. Within hours of Bitcoin miners “locking in” BIP 91 SegWit support last week, developer ACINQ released a Lightning Network-ready Android app called Eclair Wallet to run only the Bitcoin Testnet until SegWit is activated on the network.
The idea is to make it possible to perform both on-chain and LN transactions that are cheaper and faster especially for mini-payments using Bitcoin.
If the scaling issue pans out as expected, there would be several other implementations that would be geared towards making the acceptance of Bitcoin more easier.
Should we expect more investors in crypto space?
These initiatives would come handy as the global economy continues to experience its share of unfriendly developments.
For example, Europe’s top financial governing council could soon start slowing the amount of money the bank will inject into the economy. The recent announcement led to the latest drop in the value of the British Pound Sterling against the euro which is having a toll on holidaymakers heading to Europe for the weekend.
This provides a classic example of a good opportunity for Europe-based Bitcoin card or payment operators to push their products as a plausible alternative during this situation, which has been seen as a temporary depreciation.
The Guardian reports of a given exchange rate of as low as 88 euro cents for one pound offered at Cardiff airport after a difficult week for the British currency on the foreign exchange markets as it fell to its lowest level for eight months to €1.11. This was following a move by the head of the European Central Bank, Mario Draghi, who pushed the euro higher on the foreign exchange markets.
Also, considering the age range of major users of digital currencies and the level of their risk appetite, the growing crypto economy shows that more investors are diversifying into cryptocurrencies.
If this momentum is sustained even as the scaling issue gets resolved once and for all, a new tranche of smart investor money could be injected into the ecosystem.