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

The hyper-financialization of the world has already begun with the financial sector becoming a relatively bigger part of the economy, growing in size and importance. Financial structures are now fast creeping up in other sectors as well. 

For instance, in 2023, Americans spent more than $100 billion on state-run lotteries, according to The Economist, which reported poorer citizens spent a staggering amount on tickets. Additionally, the online sports betting market, valued at over $100 billion, is projected to generate almost $46 billion in revenue this year, with a 3.9% user penetration. 

Moreover, Robinhood, a commission-free investing platform popular among retail, has seen its number of funded customers rise to 23.9 million and assets under custody surge to $129.6 billion, yet another prime example of the hyper-financialization trend. It was during the COVID-19 pandemic in 2020 that Robinhood started gaining traction, and the trend of hyper-financialization was exacerbated. For people stuck in their homes, the online world became their primary means of entertainment and social interaction. 

Then, the governments injected billions of dollars into the market, providing people with an incentive to bet their money on markets. The subsequent surge in inflation and the weak economy around the world have now further intensified this trend as people bear the burden of survival. 

It has led to a heightened proliferation of financial structures in different spheres of life, which means that both builders and consumers are taking this route. 

The crypto industry

As we can see in crypto, it has grown from less than $150 billion in March 2020 to now worth $2.7 trillion. This explosive growth is not only turbocharging the hyper financialization trend for finance with yield farming, restaking, points, rewards, and meme coins but also for art via NFTs, social dynamics through social tokens and platforms like Friendtech, gaming with play-to-earn concepts, and physical assets via tokenization.

Then, there are prediction markets that allow people to bet on all kinds of events. These range from the US 2024 Presidential election outcome to whether Bitcoin will hit $100k by year-end, if Drake’s verse in “Wah Gwan Delilah” is AI, what will be ‘Bad Boys: Ride or Die’ Opening Weekend Box Office, or if Fed will raise rates this year?

This growing trend of hyper-financialization is detrimental to society, given that it broadens the already widening wealth gap by increasing wealth concentration and contributing to economic inequality. Not to mention, this will lead to even bigger asset bubbles, short-term focus over long-term approach, and more interest in speculative investments. 

Here, crypto can help provide a better way to approach hyper-financialization. After all, middlemen are where the wealth lies, and the use of blockchain technology removes this third party from the equation, bringing trustlessness, traceability, and immutability to the market. Blockchain actually allows the hyper-financialization to be fair and transparent.

Before crypto, not everyone was allowed to participate in markets. But through disintermediation and permissionlessness, crypto has made markets more efficient and accessible. Not to mention, one gets total control over their data, mitigating the risk of data manipulation and privacy invasion.

A better way to deal with hyper-financialization

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

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

The largest crypto network has now also been seeing experimentation as both developers and investors use it as a base to build a truly decentralized future of finance and value.

For so long, Bitcoin has been a low-activity blockchain, its key role being a store of value. While Bitcoin has been playing a passive role in the blockchain world all these years, it finally changed with the Taproot upgrade that brought NFTs into the BTC realm. Then there has been an increasing interest in tokenization, that too from institutions like Blackrock. 

This focus on expanding Bitcoin’s utility has sparked a wave of innovation, and the day is not far when BTC might dethrone Ethereum to 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. 

So, with these developments, Bitcoin is now evolving to start its new era of utility and innovation after fulfilling its original vision of being a peer-to-peer electronic cash system. 

As everything turns into a financial asset and becomes tradable, attention, which is a scarce resource, will become even more critical. Bitcoin has already solidified its position in the attention economy, and the newfound interest in regulatory complaints and the widely adopted BTC to drive productivity will see it lead the future of digital economies. This points to a world where crypto is leading the charge for hyper-financialization, with BTC in the driver’s seat.

So, to conclude, the resilient Bitcoin network that survived the test of time spectacularly 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 just protect yourself from a future that is going to be super fixated on financialization aspect but to take advantage of it to build wealth and thrive.

Jeroen Develter is the chief operating officer at Persistence Labs and a seasoned professional in both finance and tech start-up environments. With a decade of international experience in consulting, management, entrepreneurship, and leadership, Jeroen excels at analyzing complex business cases, establishing streamlined operations, and creating scalable processes. With Persistence, Jeroen oversees all product and engineering efforts and is deeply passionate about enhancing Bitcoin defi, or BTCfi, adoption and using intents to develop scalable, fast, secure, and user-friendly solutions. His work at Persistence Labs addresses the significant interoperability challenges between Bitcoin L2s.  In addition, Jeroen is also a co-host of the Stacked Podcast, a platform for gaining knowledge about Bitcoin and crypto from prominent Bitcoin builders.