If you’ve never personally witnessed a rocket launching, I recommend taking the time (and the trip, if necessary) to do so.
It is an awesome experience hearing the rumble and roar of the rocket engines, feeling the rumble through the ground even though you’re a half-mile or more away, and seeing the rocket, slowly at first, lift off and accelerate into the sky, eventually breaking free of gravity’s pull after it reaches escape velocity.
When you think about the rocket launch, though, you may not have considered that the launch process starts well before you actually see the rocket move. There are months and years of preparation to get to the launch point.
And, then, when it is time for liftoff, the rocket’s initial movements are so slow that you may wonder if it will actually get more than a few feet off the ground.
As it begins to move, though, the speed accumulates, even exponentially, and once it reaches escape velocity, earth’s gravity can no longer hold it down.
It looks like this:
In mathematical terms, it looks like this:
Image by David Shortt, via The Planetary Society
Cryptocurrencies have followed a similar path, starting with the development process (which can look slow from the outside). With all of the years of preparation and background work by companies to develop cryptocurrencies, smart investors are asking:
Has crypto reached escape velocity?
A breakthrough factor
One of the biggest factors to watch to get an idea of upside potential is what industrial investors such as banks and large multinational corporations are doing.
And what they’re doing clearly points towards their belief in cryptocurrencies.
Take what consumer personal finance and fintech (financial technology) companies are offering. Jayna Rohslau with Bloomberg writes:
SoFi Technologies Inc. plans to offer crypto spot trading and global remittances[, enabling money transfers across international borders via a blockchain process,] to benefit from an ease-up in regulations under the Trump administration.
You can be sure that SoFi, who works primarily with young professionals and those on the cutting edge of investment technologies, is getting back into working with cryptocurrencies because they see it becoming more widely accepted both now and in the coming future.
Making crypto purchases and the ability to move funds via the blockchain globally will only accelerate the acceptance of crypto in the wider consumer market.
And wider acceptance means increased demand and higher valuations.
It’s important to know, though, that the expanding acceptance of crypto is..
Not just for those on the cutting edge
Moving into cryptocurrencies isn’t just for the cutting edge – at least, not anymore.
In a surprise move, mortgage lending giants are reconsidering cryptocurrencies for their customers. Alex Viega with the Associated Press writes:
William Pulte, director of the Federal Housing Finance Agency, which oversees Fannie and Freddie, ordered the agencies Wednesday to prepare a proposal for consideration of crypto as an asset for reserves when they assess risks in single-family home loans.
Translation: You’ll soon be able to list your cryptocurrencies as reserve assets for your home mortgage loan. Now, that doesn’t mean you have to! But you’ll have the option.
By sharing crypto transaction data (especially from centralized exchanges like Coinbase), you provide another source source of financial information to help lenders better assess borrower risk. The goal is to use blockchain transaction history (such as deposits, withdrawals and balances) as part of a mortgage applicant’s financial profile. Similar to how bank statements or credit score are used today.
First, just by itself, that’s amazing.
Second, consider that this new use of crypto will encourage consumers who would otherwise have stashed the funds into a savings account to put those funds into crypto instead! To take advantage of crypto’s growth potential while still meeting mortgage lender requirements.
I expect such a change will increase consumer demand significantly. And increased demand means higher crypto prices (well, not for stablecoins).
Even bigger news, though?
That’s just the beginning
Because the institutions aren’t just working with more crypto options to offer consumers. Institutions are actively investing in crypto themselves. Zoltan Vardai with CoinTelegraph gives us one prominent example:
On Thursday, Nasdaq-listed Lion Group Holding (LGHL) announced plans to establish a $600 million crypto treasury reserve, with the Hyperliquid (HYPE) token as its main asset.
$600 million isn’t small change, and Lion Group Holding is one of many organizations diving head first into crypto investing on an institutional level based on their reading of the tea leaves.
Increased institutional demand nearly always increases consumer demand. People follow the big movers in the financial space.
And if that weren’t enough, major non-finance companies have indicated plans to move into the crypto market. They’re savvy to the future of money. And we’re talking about companies that you wouldn’t have associated with crypto. For example, Emily Nicolle with Bloomberg reports:
In the last month alone, Fiserv Inc., Kakaopay Corp., Amazon.com Inc., Walmart Inc. and Banco Santander SA were among the names reported to have thrown their hat into the ring to create – or at least contemplate creating – their own stablecoins.
Can you even imagine how a Walmart stablecoin or an Amazon-branded token will increase the comfort level of your average American? How many people are just waiting for these everyday corporate juggernauts they already know and trust to give crypto a nod?
Stablecoins released by Fortune 500 companies are a big enough deal that they could send crypto significantly higher by themselves. On top of the other points mentioned above, crypto prices look like they are about to reach escape velocity. Next stop? Who knows?
What’s the takeaway for you?
Get ahead of the trend while you still can. Take advantage of the accelerating growth of cryptocurrencies based on this massive wave of institutional adoption. Wouldn’t you prefer to be on the receiving end of that growth? Don’t stand under the rocket – climb on inside!
How can you do that? By starting your own digital IRA with BitIRA (open online in less than 10 minutes). If you’d like to learn more about the benefits of diversifying with crypto, you can continue your due diligence by learning more about digital currency IRAs.
