 ▲ Bitcoin (BTC) |
Bitcoin (BTC) has successfully entered the heart of Wall Street. However, according to a Bloomberg report on February 18 (local time), it is now facing a new barrier described as the innovator’s dilemma. Once hailed as an alternative to the traditional financial system, Bitcoin has become an institutional asset following the approval of spot ETFs and participation by major asset managers. Yet acceptance by mainstream finance has ironically dampened Bitcoin’s inherent dynamism and increased its correlation with traditional financial assets.
Financial experts say that as Bitcoin becomes more institutionalized, it may be difficult to expect the explosive returns seen in the past. The influx of massive capital has improved market efficiency, but price movements are increasingly shaped by institutional investors’ risk management strategies. In particular, as its correlation with the Nasdaq index and gold prices intensifies, Bitcoin’s appeal as an independent store of value is being put to the test.
Recent market data supports these concerns. Inflows into spot Bitcoin ETFs peaked in the first quarter and have since slowed. Institutional investors are beginning to treat Bitcoin not as a long-term holding but as part of a portfolio allocation adjusted according to macroeconomic variables. As a result, Bitcoin has failed to break through the strong psychological resistance level of $70,000 and continues to trade sideways.
Yahoo Finance analyzed that despite Wall Street’s embrace of Bitcoin, investor enthusiasm is not what it once was. As institutions attempt to keep Bitcoin’s volatility within manageable limits, its characteristic speculative appeal has diminished. Critics argue that rather than delivering the disruptive innovation early investors had anticipated, Bitcoin may remain a supplementary asset within the existing financial system.
There are growing calls that for Bitcoin to overcome the innovator’s dilemma, it must prove tangible economic utility beyond serving merely as an investment asset. While it has achieved institutional acceptance, the key question is what differentiated role it will play within the financial system. Wall Street is once again paying attention to Bitcoin’s technological scalability and potential as a payment method, factors likely to determine its future price trajectory.
Since becoming part of Wall Street’s mainstream, Bitcoin has been experiencing its most challenging growing pains. How it breaks through the typical stagnation that occurs when innovative technology is absorbed into the establishment system will likely redefine its future value. The market is watching closely to see whether Bitcoin will remain part of mainstream finance or once again deliver innovation that reshapes the landscape.
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