In 1962, the sociologist Everett Rogers published the well-known book Diffusion of Innovations, in which Consumers were divided into the following five groups: Innovators, Early Adopters, Early Majority, Late Majority and Delayed.
Adoption curve. Source: Business-to-you
Since its inception, The above graphic is common in many industries, although new technologies have better synthesized this research. The graphic perfectly describes how each group’s psychological profile reflects consumer habits and how they approach innovative products and services. One of the most important areas to be highlighted is the clear breaking point known as the Abyss.
Consumer preferences vary widely
This gap between early adopters and early majority exists because consumers prefer to listen to and copy references from their group. This leap represents the transition to a conventional market and has many similarities to the current life cycle of cryptocurrencies..
So, Crossing the abyss is paramount for any product or service that is ready to serve a more pragmatic customer base.
Geoffrey A. Moore’s book Crossing the Abyss says so To close this gap, the product has to offer a complete solution and a high level of service to attract pragmatists and build a good reputation through word of mouth.
The growth of smartphones is a good example
Worldwide smartphone sales (millions). Source: Statista
Although smartphones are a household name today, their growth in the first two years of this industry averaged only 20% per year.. Over the next five years, a 50% growth rate showed that the technology had moved a much larger group of users.
Apple’s iPhone was launched in June 2007 and sold more than 300,000 units on the first weekend. The iPhone 3G came a year later and hit a record 1 million units sold the first weekend.
In such a scenario one would expect a stable and healthy price table for Apple (AAPL) during this period, but this was not the case.
The Apple Price (AAPL). Source: TradingView
As seen, There was a 63% recovery during the second half of 2007, but even in that period there was a 22% decline in just five days. The beginning of 2008 was also a difficult time for shareholders as AAPL fell from $ 28 to $ 18 in less than a month.
During this time, Apple shares lagged the SP 500 by 29.5% in the first quarter of 2008.
The spread of smartphones in the mobile communications market. Source: ComScore
ComScore data shows that In 2008, US smartphone penetration struggled to reach the 10% mark. Consumers were undoubtedly in the “early introduction” phase, giving investors reason to doubt the optimistic expectations, even if they came from reputable investment firms.
Bitcoin 2020 vs. Apple 2008
Comparison of the S P 500 (2008) with the BTC USD (2020). Source: Cointelegraph
As shown in the graphic above, recent surveys show this 11% of Americans own Bitcoin, which corresponds to the same penetration of smartphones as in December 2008. Similar trends can be seen in price volatility and the correlation between Bitcoin and the SP 500.
Apple (AAPL) and the SP 500 90-day correlation. Source: TradingView
90-day correlation between Bitcoin and SP 500. Source: TradingView
While Bitcoin can be viewed as an innovative technology with undeniable advantages over traditional financial instruments and gold itself, it still has to demonstrate its trillion-dollar potential. Changing human patterns and especially beliefs is a big task.
The definition of money has been deeply engraved in society by fiat systems that rely on intermediaries. In addition, “money” is often subject to unpredictable control by governments and central banks. Bitcoin can go through some kind of metamorphosis to reach an early majority of pragmatists.
The launch of the iPhone 4 in June 2010 finally sparked these pragmatists. Was it the 5 megapixel camera with a resolution of 720p? Could it have been the start of FaceTime? Maybe the App Store reached 5 billion downloads or the reduced $ 99 two-year contract for the old 3GS model?
It is possible that it was a combination of these product offerings and milestoneswhich allowed Apple to avoid the abyss.
I’m looking forward to
It is an unsuccessful exercise to imagine what it takes to change an entire niche of participants who are already aware of the benefits of Bitcoin but have remained unaffected so far.
Small adoption catalysts have already been set up for dealers and investors. For example BitPay and Coinbase Commerce, but there is still a lot of room for improvement.
Apple investors who fled in 2008 due to stock price volatility, a 20% loss in value, or the uncertainties surrounding the upcoming mainstream rollout are likely to regret it now. That’s because AAPL stock rose 520% over the next three years, reaching $ 78 in early 2012.
A similar growth result for Bitcoin would bring the price to around $ 59,900, which would mean a market cap of $ 1.1 trillion. in 2023. Of course, that sounds incredibly unreasonable to many.
A potential $ 1 trillion valuation for Bitcoin represents only 10% of the total $ 11 trillion gold market cap. Even though it seems like an impossible number it is only 3% of the current global supply of banknotes, coins and check deposits.
The views and opinions expressed here are solely those of author and do not necessarily reflect Cointelegraph’s views. Every step of investment and trading involves risks. You have to do your own research when making a decision.