The First Domino
A paradigm shift in banking
Coinbase is about to turn a lot of heads.
With the addition of direct deposit from your employer and the ability to use their debit card, what’s the point of using a traditional bank?
Most people don’t understand the value here. Let’s think about this in a long-term mindset. Based on current banking trends, young people will likely not choose a traditional bank with significant fees and a brick-and-mortar establishment as young people come into the workforce. There is a higher probability of new workers choosing an online-only or crypto bank with the same features, fewer fees, and 3-4% interest through crypto lending with products such as Circle’s USDC, pegged to the US dollar. Especially in the trends of usage of mobile banking and the growth of digital neo banks such as Chime, I think that this sector continues to grow.
This change will take time, but this could be the first event to cascade and dethrone the traditional banking industry or challenge their hold on financial market share. With more Baby boomers retiring and more Millennials entering the workforce, the control over US finance will gradually shift. The infographic below from 2019 shows how much financial control Baby boomers have. As this generation passes away, the shift of wealth to the newer generations will cause a rise in online and crypto-focused banks.
Slowly software will eat the world, and as we have seen with the takeover of Amazon’s market domination these last 20 years, we will see this change in many more sectors as blockchain becomes more prevalent. By 2030, research shows a projected growth of blockchain to reach 104.19 Billion from its 2020 rate of 3.04 billion. These numbers have been boosted by the prevalence of COVID and the digitalization of social and work lives.
Overall, a beautiful picture for the blockchain sector is painted using multiple market trends and the historical growth of tech companies as an indicator for potential growth. Again this is the first domino, and I am looking forward to the chain reaction playing out.