Bitcoin is the solution to an inevitable hyperfinancialization

If there’s one thing that’s becoming clear, it’s that hyper-financialization is inevitable, and our best chance of successfully navigating it is through bitcoin (btc). This decentralized cryptocurrency, known for its fixed supply and strong security, offers a unique solution to the looming problem of wealth inequality and concentration of power. By embracing bitcoin, we can create a more transparent and resilient financial future, or risk losing our financial sovereignty to a handful of corporations.

The hyper-financialisation of the world has already begun: the financial sector has become a relatively larger part of the economy and has grown in size and importance. Financial structures are also rapidly emerging in other sectors.

For example, in 2023, Americans spent more than $100 billion on state lotteries, according According to The Economist, poorer citizens spent a staggering amount on tickets. In addition, the online sports betting market, valued at more than $100 billion, is projected generate nearly $46 billion in revenue this year, with user penetration of 3.9%.

Additionally, Robinhood, a commission-free investment platform popular with retailers, has seen its funded customer count rise to 23.9 million and assets under custody to $129.6 billion, another prime example of the hyperfinancialization trend. It was during the COVID-19 pandemic in 2020 that Robinhood began to gain traction, and the hyperfinancialization trend became more acute. For people stuck at home, the online world became their primary means of entertainment and social interaction.

Governments then pumped billions of dollars into the market, giving people an incentive to gamble their money in the markets. The subsequent rise in inflation and weakness in the global economy have further intensified this trend as people bear the burden of survival.

This has led to a further proliferation of financial structures in different spheres of life, meaning that both builders and consumers are taking this path.

As we can see, in the case of cryptocurrencies, they have grown from less than $150 billion in March 2020 to a current value of $2.7 trillion. This explosive growth is not only driving the hyper-financing trend of finance with yield farming, resttaking, points, rewards, and meme coins, but also art through nfts, social dynamics through social tokens and platforms like Friendtech, games with “play-to-earn” concepts, and physical assets through tokenization.

There are also prediction markets that allow people to bet on all sorts of events. These range from the outcome of the 2024 U.S. presidential election to whether bitcoin will hit $100,000 by the end of the year, whether Drake’s verse in “Wah Gwan Delilah” is ai, what the opening weekend box office gross of “Bad Boys: Ride or Die” will be, or whether the Federal Reserve will raise rates this year.

This growing trend towards hyper-financialisation is detrimental to society as it widens the already widening wealth gap by increasing wealth concentration and contributing to economic inequality. Furthermore, this will lead to even bigger asset bubbles, a short-term rather than a long-term focus and an increased interest in speculative investments.

In this sense, cryptocurrencies can help offer a better way to address hyper-financialization. After all, middlemen are where wealth resides, and the use of blockchain technology removes this third party from the equation, bringing trustlessness, traceability, and immutability to the market. Blockchain technology, in fact, enables hyper-financialization to be fair and transparent.

Before cryptocurrencies, not everyone could participate in markets. But, thanks to disintermediation and permissionlessness, cryptocurrencies have made markets more efficient and accessible. Moreover, each person gains full control over their data, mitigating the risk of data manipulation and invasion of privacy.

This is where bitcoin offers the perfect solution. This decentralized peer-to-peer network enables financial inclusion and censorship resistance, which is vitally important in today’s world where organizations and governments are encroaching on people’s rights. This network has a decade-and-a-half history behind it, offering a solid and secure platform for people to achieve financial sovereignty.

The trillion-dollar asset class also serves as a hedge against inflation, allowing holders to preserve their wealth over time. Unlike fiat currencies, which are devalued by policies, bitcoin’s fixed supply and decentralization protect it from such pressures, making it the perfect asset to hold in a world where everyone is competing to extract value.

The largest crypto network has now also been the subject of experimentation, as developers and investors alike use it as a foundation to build a truly decentralized future of finance and value.

For a long time, bitcoin has been a low-activity blockchain, with its key role being that of a store of value. While bitcoin has played a passive role in the blockchain world for all these years, that finally changed with the Taproot upgrade that brought nfts into the btc realm. Then there has been a growing interest in tokenization, also by institutions like Blackrock.

This focus on expanding bitcoin’s utility has triggered a wave of innovation, and the day is not far off when btc can dethrone ethereum and become the go-to blockchain for decentralized finance. Several aspects, including bitcoin’s robust security framework, widespread recognition, and institutional interest, are positioning bitcoin at the forefront of defi innovation.

Thus, with these developments, bitcoin is now evolving to begin its new era of utility and innovation after fulfilling its original vision of being a peer to peer electronic cash system.

As everything becomes a financial asset and becomes tradable, attention, which is a scarce resource, will become even more critical. bitcoin has already cemented its position in the attention economy, and the new interest in regulatory complaints and the wide adoption of btc to drive productivity will see it lead the future of digital economies. This points to a world where cryptocurrencies are leading the charge of hyper-financialization, with btc in the driver’s seat.

So, to conclude, the resilient bitcoin network that has survived the test of time in spectacular fashion may have started as a way to facilitate the transparent flow of monetary value, but today it has become a foundation of hope to not only protect against a future that will be hyper-fixated on the aspect of financialization, but to leverage it to generate wealth and prosper.