Invesco Canada blog

Insights, commentary and investing expertise

Invesco Private Capital | July 5, 2018

Why bitcoin is only the beginning

Developments in cryptocurrencies are fueling the next technology revolution

The rise of Bitcoin and other cryptoassets has captivated investors and fueled speculation in ways not seen since the dotcom bubble of 1998-2000.

While it’s clear the Bitcoin craze has all the marks of a speculative bubble, the story doesn’t end there. Cryptotokens are just the start of a real — and potentially transformative — technology set to underpin many areas of financial services in the future.

As such, investors should be focused on a key question: what will the next phase look like when the frenzy has died down?

In our latest issue of Risk and Reward, our technology experts Evan Jaysane-Darr, Jessica Mulvihill, and Marian Waheed take a deep dive into the underlying technology of cryptoassets, showing how it works and why it could truly transform the global economy in the future.

In this post, we’ve highlighted 4 key takeaways about the cryptoasset revolution underway today and what it could mean for the future:

4 key takeaways

1 – It’s looking a lot like 2002

The price of the best known cryptoasset, Bitcoin, has mimicked that of the NASDAQ bubble with remarkable precision – and, if that trend continues, there is more short-term pain to come for Bitcoin holders.

2 – This is about more than Bitcoin – and it will be transformative

Economist Carlota Perez has tracked the history of technology and its economic impact.  Whether it’s the Industrial Revolution or the rise of automobiles, each innovation has involved 4 key phases – irruption, frenzy, synergy, and maturity — as the technology is diffused across society. Blockchain has the potential to enable a disintermediated, frictionless marketplace. As a result some venture capitalists regard cryptoassets as the next paradigm — a new, decentralized internet. If the prediction is accurate, Bitcoin’s challenges today could give way to a bigger and more positive story over the long term, as the technology gets deployed across society.

3 – This could replace traditional banks   

Ultimately, the price of Bitcoin is less important than the potential found in the underlying technology: blockchain. It’s a digital ledger in which cryptocurrency transactions are recorded publicly. In the future, this could create an alternative to traditional banking that allows individuals or institutions to transfer money without an intermediary.

4 – It goes beyond currency   

An open blockchain has potential to support a decentralized currency and it can also enable so-called “smart contracts”, which are virtually immune to tampering and fraud. Setting up contracted and frictionless execution could be used across most sectors of the economy, including financial services, healthcare, real estate and insurance.

To dig deeper and learn more, read the full version of “The latest frenzy: rise of the token”



More from Invesco Private Capital

Why bitcoin is only the beginning
July 5, 2018

Subscribe to the blog

Subscribe to receive notifications for: *

Do you want to subscribe in French?

Subscribe to receive e-mails from Invesco Canada Ltd. about this blog. To unsubscribe, please e-mail or contact us.

Important Information

The article is intended only for accredited investors as defined under National Instrument 45-106 in Canada.

Certain products mentioned are available via other affiliated entities. Not all products are available in all jurisdictions.

All articles in this publication are written, unless otherwise stated, by Invesco professionals. The opinions expressed are those of the author or Invesco, are based upon current market conditions and are subject to change without notice. This publication does not form part of any prospectus. This document contains general information only and does not take into account individual objectives, taxation position or financial needs. Nor does this constitute a recommendation of the suitability of any investment strategy for a particular investor. While great care has been taken to ensure that the information contained herein is accurate, no responsibility can be accepted for any errors, mistakes or omissions or for any action taken in reliance thereon.

Opinions and forecasts are subject to change without notice. The value of investments and any income will fluctuate (this may partly be the result of capital, distribution of income or the performance of any fund or strategy. Past performance is not a guide for future returns. This document is not an invitation to subscribe for shares in a fund nor is it to be construed as an offer to buy or sell any financial instruments. As with all investments, there are associated inherent risks.

This document is by way of information only. This document has been prepared only for those persons to whom Invesco has provided it. It should not be relied upon by anyone else and you may only reproduce, circulate and use this document (or any part of it) with the consent of Invesco.

Asset management services are provided by Invesco in accordance with appropriate local legislation and regulations.