Crypto is evergreen. And, for years, crypto has given impressive returns. Users have even seen market valuations of over $2 trillion thanks to bull runs.
But, investors have had a rough year so far as their portfolios have suffered losses due to the prolonged bear market conditions. And, due to the severe losses and several cryptos hitting all-time lows, you may wonder, “Is crypto dead or the future?”
To answer that question, we’ll have to look at several things. But there’s one thing you must remember; even though the cryptocurrency market continues to slide, don’t lose sight of the fact that crypto is still alive and presents promising chances.
This article will briefly analyze – “Is crypto dead or the future?
- What Is the Reason for Cryptocurrency Crash?
- Is Cryptocurrency the Future of Money?
- When Will the Next Crypto Bull Run Begin?
What Is the Reason for Cryptocurrency Crash?
There have been lots of price swings in the crypto space lately. But, crypto market collapses are nothing new. Here are some reasons behind the crypto crash:
Yes, the FTX-Binance issue isn’t the only thing affecting cryptocurrency pricing, but it’s the most recent. One of the largest cryptocurrency exchanges, FTX, went bankrupt recently. And all major currencies, including Bitcoin, have dropped by more than 70% since December 6 due to FTX’s collapse.
Rising interest rates
This year’s crypto meltdown and the recent decline in BTC value is mostly due to rising interest rates. The pandemic has caused crazy inflation and price increases across the globe, including in the United States.
Several central banks have raised interest rates to slow the circulation of money and thus reduce inflation. And among these central banks is the Federal Reserve in the United States.
When interest rates rise, people have less hunger for risky investments like cryptos. Hence, due to the low demand, crypto prices fall.
The Collapse of Terra Luna
The de-peg of the TerraUSD stablecoin from the US dollar, which in turn led to the devaluation of the Luna crypto, is another reason for the crypto market crash.
When LUNA’s price dropped by 95% in a single day on May 7, 2022, it sent shockwaves throughout the cryptocurrency market, causing a general downward trend for most coins. And since then, the market has been down and hasn’t risen yet.
The Persistent Decline in Bitcoin Price
Since the LUNA crash, Bitcoin prices have been steadily falling. And, since Bitcoin controls most of the crypto market, this led to almost every crypto crashing. Also, Bitcoin’s value has dropped by more than 70% since its all-time high of $68k in December 2021.
Speculation and Manipulation
It’s normal for investors to sell their holdings when the cryptocurrency market is crashing. Normally, small-scale selling of cryptos doesn’t cause much activity in the market.
But, when large cryptocurrency holders, known as “whales,” sell off their holdings, it leads to market manipulation and a drastic price decline. Then, the crypto market sets off a chain reaction of fear, uncertainty, and doubt (FUD) that contributes to the market’s decline.
Is Cryptocurrency the Future of Money?
Yes, crypto is indeed the future of money.
Here are 5 reasons why crypto is the future of money:
A New Era of Decentralization Has Begun
We have entered an era in which citizens can own and manage all of their assets. With decentralization, you have financial independence resistant to the volatility of banks and governments.
In decentralization, there are no intermediaries involved. Hence, it increases honesty and strengthens the safety of financial dealings. Hence, the decentralized finance (Defi) system will replace the traditional financial system.
Everybody wants to save costs and money wherever possible. But, when intermediaries are involved in the traditional financial system, this isn’t possible. That’s because you incur extra costs in the presence of intermediaries. And, the greater the number of intermediaries, the greater the unnecessary costs.
However, P2P or Peer-to-Peer system solves this issue. In P2P, there’s no need for a middleman when transferring money or goods. Hence, this characteristic leads to transparency, security, and reduced complexity.
And, since people feel happier, they’ll stick to this channel for transactions. Hence, the P2P nature of cryptocurrency will replace the traditional financial system.
Simplicity of Use
Earlier, we spent lots of time waiting in line, filing, and filling out paperwork only to send or receive money. Also, do you remember when traditional banks used to put our monetary operations on hold because of server outages and national holidays? That was a complete bummer!
But, with cryptocurrency, there are endless possibilities. They are convenient and easy to use compared to traditional banks and financial systems.
You can transact with crypto and blockchain technologies with your mobile phone or computer. And, that too, in the comfort of your home.
Moreover, since people want comfort and convenience, crypto will eventually replace traditional financial systems.
We always worry that someone could use our inputted financial information unethically or that someone else’s system keeps tabs on our every move. But, in the crypto space, data breaches are nearly impossible. That’s because the whole blockchain and crypto space has negligible personally identifiable information.
And, thanks to their encrypted transactions, you can feel safe about your funds. Hence, by providing this level of safety, blockchain technology has the potential to revolutionize every facet of human life.
Worldwide Adoption and Acceptance
In the past, sending or receiving funds across borders required a larger financial outlay. But, crypto and De-Fi solve this problem. They offer mobility and economic progress because national borders do not constrain them. As a bonus, they are quick, simple, and cheap.
Also, blockchain can improve countries’ economic health by increasing trade and providing new economic opportunities.
When Will the Next Crypto Bull Run Begin?
Who doesn’t want to know when the market will go up? Everybody, right? But, let’s look at the broader picture.
Vitalik Buterin, the founder of the Ethereum network, thinks bear runs are crucial for cryptocurrencies. That’s because when there is a less short-term speculative emphasis on cryptocurrency, developers have more time to work on the underlying technology.
And, this will lead to a better overall experience and will result in more people adopting crypto. So, now that we looked at the broader picture, let’s get back to the question at hand. So, when will the next crypto bull run begin?
According to our forecasts, the next cryptocurrency bull run will start in 2024.
This time, the widespread acceptance of Bitcoin will fuel the bull run. And, this could lead to the growth of a supporting Bitcoin infrastructure that makes using cryptocurrency simple and convenient for the masses.
And, increased consumer optimism and eagerness to put their money into new financial products like Bitcoin EFTs will fuel the next cryptocurrency bull run.
No matter what causes a market uptick in cryptocurrencies, the coins themselves will be the driving force.
Crypto is not dead and is still very much alive. Yes, we agree that the market is suffering one of the worst crashes. But, don’t let this cloud your judgment. As stated earlier, bear runs are normal and also important.
Hence, stay optimistic and HOLD. And although the outlook for the crypto market is gloomy in the near and medium term, the future of cryptocurrency is bright and positive.
But, in conclusion, crypto is not at all dead.
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