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Ethan Lou’s latest book is Once a Bitcoin Miner: Scandal and Turmoil in the Cryptocurrency Wild West.

Observers of the cryptocurrency world have long been hunting for a mythical beast: “mainstream adoption.” There’s no precise definition for what exactly it is. For years, pundits have said it’s coming. Every now and then, some say they’ve seen it. Others ask when they will see it.

Such talk has been on a crescendo the past year. The likes of Tesla Inc. and Twitter Inc. and even the country of El Salvador entered the fray. From buying bitcoins to integrating crypto into their operations, these players fuelled a surge of wider-world enthusiasm in 2021. Amid rising inflation, Bitcoin was pushed to new heights of US$69,000, up more than 130 per cent for the year, and so lifted the wider crypto market. Search online for any big company or public figure and add the word “crypto,” and you will find a relevant news report.

Perhaps mainstream adoption is finally here – but how committed it is remains a serious question. And if those big new players just packed up and left, what would happen to the market that seemed to have risen on their entrance?

Not all will exit, of course. The outspoken Michael Saylor, who directed MicroStrategy Inc. to buy more than 120,000 bitcoins, owns 70 per cent of his business intelligence firm. And there are many like him who have both conviction and the ability to be firm on it. But others who spearheaded their organization’s crypto moves might have less independence, beholden to shareholders, regulators and public sentiment. It will not take a lot for those organizations to abandon ship as easily as they had hopped on.

For in the bull run of the past year, just like how everyone was a genius, every company was also a pair of unshakable “diamond hands”: the crypto term describing unreactive, iron-faced stoicism against volatile price movements. Now that bitcoin is hovering around $40,000, it’s an open question how many of these new entrants have the stomach for more drops. And for many big organizations, crypto has been just one focus in a wide range, easily lost among larger developments that do not even need to be related.

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Take, for example, the government of El Salvador: President Nayib Bukele made bitcoin legal tender, directed the country to buy more than 1,000 units and then announced at the base of a volcano that he was going to start a “bitcoin city” while wearing a backward baseball cap. It’s easy to forget that this is also a President mired in muck, facing increasing instability and up for re-election in two years. One truism in politics is “easy come, easy go.” How quickly Mr. Bukele had ushered in his bitcoin law could also be how quickly it becomes undone.

Such potential shakiness on crypto can be pervasive. It could extend, for example, to Twitter, whose stock has fallen more than 50 per cent the past year under its crypto vision and which is now without its firm-believer and founder, Jack Dorsey. It might extend even to Tesla, where Elon Musk has said the company holds its 42,000 bitcoins with “diamond hands.” Mr. Musk may effectively have full control of Tesla, but he has already flipped-flopped once on his bitcoin enthusiasm on what critics have said was a relatively thin pretext. Either Mr. Musk was pressured into it or he is highly mercurial.

All of this is not to say that any one big mainstream player will surely abandon the crypto ship. It’s just that each of their embraces of crypto is its own complicated story and should not be taken for granted.

Whether current or historical, examples are endless of companies trying to do crypto and then apparently shelving plans for whatever reason: the privately held messaging platform Discord; Meta Platforms Inc., back when it was called Facebook; Goldman Sachs Group Inc., which later un-shelved its plans, signaling even more unpredictability. And who can forget Venezuela and its much-hyped “petro” coin that now seems to have just disappeared?

Historically, mainstream players boost prices as much as prices attract mainstream players. While bear markets are only ever reliably identified in retrospect, there’s every likelihood that with further turbulence, many current shining examples of mainstream interest will grow quiet, and that could precipitate steeper drops. These influxes of mainstream attention need to be treated the same as bitcoin’s highs. It’s not the last we’ll hear of them, but they are only ever momentary peaks.

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