Rumors have been circulating for months that Amazon (NASDAQ:AMZN) or Starbucks (NASDAQ:SBUX) might begin accepting cryptos as payment. If that does occur, it would, in my opinion, be a significant boon for both the adoption and the price action of the crypto sector.
Remember that in December when the price started rising, all of a sudden there was a mania of new interest. Which admittedly included a lot of speculation.
Although what was missing back then was further adoption. Which could be in the cards if the proposed Amazon or Starbucks crypto-ventures should manifest itself.
Consider the following scenario.
People are waiting online at Starbucks and see a sign saying that Bitcoin or Litecoin are accepted as payment. Certainly it’s at least great advertising. Because while some might see it and not think twice initially, there are still a lot of people seeing something new about cryptos. Who may well ask more about it.
Also given the psychological nature of how investors often begin to pile in once the price starts to move, it’s interesting to think about how this could affect the pricing.
Certainly if you want to debate from a trading standpoint whether that’s a good strategy, there’s room for discussion. Yet to the degree that this is how people often respond in today’s markets, it’s easy to imagine a self-perpetuating loop developing. And there’s also a degree to which the people who won’t look initially will still be seeing more and more about cryptos over time. Which would likely lead to them begin to develop a level of familiarity and comfort. At the same time the adoption is growing.
As more people see the crypto option and begin to use it, that in itself will force the price higher. And as the price goes higher, more people begin paying attention.
Add in the rapidly deteriorating dollar system to the equation, and should there be a break in the establishment markets at the same time cryptos are being used more for everyday transactions, that could well be the spark for the next leg of the rally.
Some still argue that cryptos don’t provide any tangible value. But it’s not easy to come up with an argument against cryptos that doesn’t even more aptly apply to paper and electronic dollars (if you have one I’d be happy to hear it and discuss it). And just as an example, this morning I had money wired, which cost around $40 and took almost 2 hours to arrive. Whereas had I been able to use cryptos (Litecoin in particular), the transaction would have been much quicker. And less expensive.
Throw in that Litecoin can’t be printed at will in the shadows of the government dark money pools, that the dollar has lost 99% of it’s value to inflation since the Fed’s inception, and that the cryptos certainly appear to have the dominant technical infrastructure. Certainly I’d take my chances on cryptos over Federal Reserve paper.
Keep in mind that these crypto adoption deals are still being developed. So that’s different from being a done deal.
Yet the developments and underlying fundamentals indicate which way the trend is heading. And especially with the recent sell-off in the crypto sector, it sure seems like an incredible buying opportunity to me.
-Chris Marcus
August 3, 2018