In the early-to-mid 2010s when cryptocurrency first came to prominence, the majority of traditional financial pundits derided it as a novelty; a mere speculative tchotchke backed by nothing of real substance. According to these people, it would never be a serious player in the global financial game.
But as time passed, cryptocurrency not only stubbornly stuck around – it thrived! Valuations of the hallmark crypto brands Bitcoin and Etherium went up 1,300% and 9,000% between the years of 2013 and 2017, respectively, and anyone who invested in these digital coins during that time period made a mint.
In reaction to this, those same financial pundits called crypto a flash in the pan. It was like the Beanie Baby bubble in the 1990s, they said; a fad that caught fire, burned brightly for a brief amount of time, but would eventually and spectacularly collapse, not least of which as an investment.
Fast forward a decade or so later and cryptocurrency is still with us, gaining momentum as a legitimate alternative asset class. The reports of crypto’s demise would appear to have been greatly exaggerated. So, what’s the explanation? How could so many traditional Wall Street pundits have been so far off the mark? What does crypto have going for it that keeps it as a financial force to be reckoned with?
By means of answering these and other pressing questions about cryptocurrency, we have consulted with Cole Diamond, noted Canadian serial entrepreneur and founder of Coinsquare, this country’s leading cryptocurrency exchange.
A New Kind of Asset
When asked why cryptocurrency has shown such staying power, Cole Diamond points out that it’s because crypto isn’t just a currency—it’s an entirely new asset class.
“Assets like stocks, bonds, or real estate have been around forever,” says Diamond. “Crypto adds something different to the mix. It’s decentralized, global, and easily accessible to anyone with an internet connection. And unlike traditional investments, cryptocurrencies aren’t controlled by a single institution or government.”
Indeed, its decentralized nature is what many crypto enthusiasts believe gives it a leg up in an increasingly digitized world. “People like the idea of having full control over their assets, without needing a middleman like a bank or broker,” explains Diamond.
Resilient to Economic Turbulence
Another factor behind cryptocurrency’s resilience is its ability to withstand economic crises. For example, during the COVID-19 pandemic, while many global markets were in freefall, Bitcoin and other major cryptocurrencies surged in value.
“There’s a misconception that crypto is just a speculative play,” says Diamond. “But what we’ve seen is that during periods of uncertainty, people are using cryptocurrency as a hedge, almost like a digital version of gold.”
Cole Diamond also points out that technological advancements in the crypto sphere—such as the development of decentralized finance (DeFi) platforms and smart contracts—have only increased crypto’s value. “People are no longer just buying and holding Bitcoin or Ethereum,” he says. “They’re using these assets to earn interest, trade without intermediaries, or even launch entirely new financial products.”
Growing Institutional Support
As mentioned in this article’s opening paragraphs, in its early days, cryptocurrency was viewed with skepticism by the majority of traditional financial pundits. This was also true of most—if not all—major financial institutions. However, according to Diamond, that has changed dramatically in recent years. “You now have massive institutional investors coming into the space,” he notes. “Companies like Tesla and MicroStrategy have all invested billions in Bitcoin, giving it an increasing air of legitimacy which has extended to a great number of other cryptocurrencies.” This growing institutional acceptance has helped normalize crypto in the eyes of many skeptics. Additionally, new regulatory frameworks are starting to take shape, giving investors much more confidence in the long-term stability of the crypto market.
Looking Ahead
As we look to the future, Cole Diamond believes that cryptocurrency is only going to become more integrated into our daily lives. “We’re already seeing central banks exploring the many options presented by digital currencies, which shows that crypto’s influence is undeniable,” he says. “The next step is mass adoption, where people are using crypto for everyday transactions, not just as an investment. We still have yet to see that happen, but I believe that day will come sooner than many people think.”
One thing is crystal clear: Cryptocurrency has now proven itself to be more than just a passing fad. With its decentralized nature, durability in the face of widespread economic turbulence, and growing support from banks and other critical institutions, it has cemented its place as a significant player in the financial world—and in a comparatively short amount of time. It’s safe to say that now, in the waning months of 2024, crypto has established its place beside stocks, bonds, and real estate as a legitimate asset class.
As Cole Diamond sums it up, “The world is changing, and crypto is right at the center of that change. Take my word for it: it’s not going anywhere.”
