The End Of Crypto: Will Cryptocurrency Market Recover?
The cryptocurrency industry has seen many downturns this year. Before the most recent controversy in 2022, the collapse of a massive exchange called FTX, Reddit users speculated whether cryptocurrencies were dead. The turmoil began with the overall market crash, continued with the Moon/Earth crash and Celsius crash, and ended with the FTX crash. The fall of FTX did not bring critical points and many economists began to speculate that it could be the end of cryptocurrencies in general and of Bitcoin in particular.
Is this the end of cryptocurrencies?
It is true that there have been hundreds of scams and crypto debacles in the last decade. Most notable was the Mt Gox crash in 2014, not to mention the brief ICO stint in 2017-2018. However, the FTX collapse not only cost billions of dollars, but largely saved the entire cryptocurrency industry.
The FTX cryptocurrency exchange fell
The more we learn about FTX, the crazier the story of the now famous cryptocurrency exchange will get. Among those assets, FTX reportedly owes $8 billion to Alameda Research. Instead, Sita obtained its own off-air obtained digital token as collateral, sending the exchange crashing after Binance CEO Changpeng Zhao hinted at trouble. Eventually, after FTX filed for bankruptcy in the US, several million dollars were quietly withdrawn from the account.
In response, Solana, a popular coin used by developers and valued by Bankman-Fried, fell by more than half. In the past five days, Bitcoin has fallen another 12% and more speculation about the cryptocurrency falling has begun. Taken together, the price of Bitcoin reached $69,000 in November 2021 before falling to $69,000 in mid-June 2022.
This has led to several articles predicting the end of cryptocurrencies and Bitcoin as an asset, including one published in The Economist. He has contributed many articles to the Bitcoin Obituary website. Overall, this is the 467th time Bitcoin has officially died.
Change means more control.
Cryptocurrencies, tokens and NFTs are created every day, and the growing demand for security and protection from clients and agents around the world has raised concerns for regulators who make a living in the world of crypto ecosystems.
This year it is $1.5 billion more than the global financial crisis of 2008.
“Regulation is arguably one of the biggest issues facing the cryptocurrency industry globally. Jeffrey Wang, head of Amber Group Americas, said clean regulation would be welcomed globally.
Many experts inside and outside the ecosystem believe that regulation is a good thing for cryptocurrencies. “Smart regulation is a win-win,” said the CEO and founder of cryptocurrency buying platform and cryptocurrency network Coinflip. "It will make people more confident in cryptocurrencies, but I think it's something we need to take our time and get right."
It is also expected that in the last half of the year, and in 2023, clear rules will continue to arrive in the world of blockchain technology. In other words, according to the experts, it could indicate greater volatility in the short term, but the incorporation of new players will increase thanks to the security generated by a regulatory framework without restrictions.
negative predictions
While many governments are now implementing new cryptocurrency regulations, some experts don't think cryptocurrencies will last. Paul Krugman, one of the best-known economists, wrote an article referring to the ongoing crypto winter at Fimbulwinter. According to Norse mythology, Fimbulwinter means "endless winter" before the end of the world. In this regard, he pointed out that this winter marked a downturn in the cryptocurrency industry.
According to Krugman, the main argument that Bitcoin removes the need for trust has not been made. This is because banks rarely steal customer funds and crypto institutions are vulnerable to temptation and high inflation. The Nobel laureate opposes the idea that cryptocurrencies and blockchain technology guarantee cheaper transactions and says that has not happened yet.
Yet another source, CNBC.com, stated in their July 2022 article that thousands of digital tokens are likely to collapse, while the number of existing blockchains on the blockchain will be crushed by unknown cryptocurrency market players in the next years.
positive predictions
One of the most famous people in the world of cryptocurrencies and cryptocurrency enthusiasts is Elon Musk. Musk believes that cryptocurrencies are not going anywhere. At last year's Code 2021 conference, Musk said that "destroying dungeons is out of the question." In a recent interview with Forbes, he concluded that he believes Bitcoin is "on the verge" of disrupting traditional finance. Recently, on November 14, he tweeted that “BTC will, but it could be a long winter.”
Another well-known financial expert, venture capitalist Tim Draper, believes that Bitcoin will hit $250,000 by mid-2023 despite the crypto winter. Draper previously predicted that Bitcoin would hit $250,000 by the end of 2022, but in early November at the Web Summit technology conference in Lisbon, he said it would take until June 2023 to become a reality. He repeated this position even after the collapse of FTX.
Most cryptocurrency leaders are not overly concerned about the long crypto winter. They say that it is the norm and a bear market in cryptocurrencies is not the same as a bear market in shares, the lows are extreme, but the highs are too. Among them are Vitalic Butyrin; In fact, he admits to being surprised that prices didn't drop faster. He believed that the decline was inevitable, but he did not make any predictions about the future.
Cryptocurrency and stock market
“Cryptocurrency bear markets are typically down 85-90%,” said Jason Yanovitz, founder of cryptocurrency research platform Blockworks. Given how new cryptocurrencies are, Yanowitz said, they are inherently more volatile. He points to Amazon (AMZN), whose share price peaked at $113 a share in the late 1990s before the internet boom sent it down 95% to $5.51. Before the 20-1 stock split went into effect on June 6, the shares were trading at more than $2,000 a share. Not only cryptocurrencies, but also other tech stocks are now seeing sharp declines, he said. Shares of Uber (UBER) are down more than 50%, Lyft (LYFT) is down 67%, and Netflix (NFLX) is down 72%.
"I don't agree with people who say there's no way to recover from something like this," Yanowitz said. I think people look at cryptocurrencies and find them weird or unrealistic. If you don't think crypto is real, you may think it's hype. But this drop is not as bad as the last cryptocurrency bear market, he added. According to him, the fall of this cryptocurrency is temporary.
abstract
Could the current market situation be the end of cryptocurrencies? Things may get worse, but in the long run there is hope that the industry will bounce back and be stronger than ever. Despite differing opinions about the fate of cryptocurrencies, there are people who make money in today's market. As Warren Buffett says, "You only know who's swimming naked when the tide is out." Will cryptocurrency be resurrected? In our next article, we will take a closer look at the positive trends in the cryptocurrency market.
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