For any bitcoin (BCH) bull, May is ending with some decidedly bearish price action. After nearly tripling from April to May from $632 to $1,818, most of those gains have since evaporated, all but confirming that we are not going to see $4,000 again any time soon. Segwit (BTC) for its part has been a bit less volatile, but the parabolic rise is clearly over. This may not be so great for bitcoin as a speculative asset, it is a good thing for bitcoin as a money.

What makes something a good money, among other things, is its relatively stable value over time relative to most other goods. Without relative stability, a good like bitcoin cannot function as a money, but only as an intermediary to money. People use money, final money, to calculate important things and take accurate measurements of profits and losses. You can’t measure profits and losses in a good whose value fluctuates wildly. And without knowing if you are operating at a profit or a loss, an economy, whether that economy by a single person or a nation, cannot allocate resources properly. The economy breaks down. See Venezuela for reference. The money there does not have a stable value, the economy cannot allocate resources properly, and people die.

Let’s face it. If bitcoin enthusiasts really tried to treat bitcoin as a full on money and record their transactions in bitcoin terms instead of using bitcoin as an intermediary but ultimately calculating in dollar terms, then their households, companies, or whatever they operate would not function.

Bitcoin appears to now be moving out of the mass recognition phase, The next step is to build the mass adoption phase. In the mass recognition phase, most of the cryptocurrency crowd consisted of speculators looking to make dollars on a quick trade. A lot of them get in and by December we were at the biggest parabola in human history. It appears that the last of the speculators are drifting out of the market, giving up on another parabolic run for now. When they are gone, or at least when they are at a minimum because there will always be some speculators, then the bulk of bitcoin owners will be either long term holders or those who actually use it as it was intended to be used, to buy things.