It only seems a short time ago that everyone seemed to be investing in Bitcoin and the promises of great riches made cryptocurrency, as a whole, teeter on the brink of being fully accepted into the mainstream. City center ATMs were being planned and no deposit bonus sportsbook offers were everywhere. But that’s all changed now.
Now the mainstream media are full of scare stories that suggest that the crypto market is far too volatile. More everyday people seem to regard digital currencies, NFTs, and blockchain technology as scams. So is that it for Bitcoin? Has the crypto bubble burst?
Peaks and Troughs
The first thing to note about everything that has been going on in the last few years is that nothing is ever as black and white as the media like to paint it. When crypto was fashionable, it wasn’t the case that everyone was doing well. Now that exchanges like FTX have gone bankrupt, not everyone has lost all their money.
As much as crypto aficionados would love to think that the system they are promoting is completely different to the traditional financial markets, it isn’t. Any financial investment comes with a risk and, yes, prices can go up as well as down. This is something that has to be accepted with crypto just as with the stock markets.
Why Did Crypto Crash?
There is no doubt that there has been a crash when it comes to cryptocurrencies though. The value of digital currencies – especially Bitcoin – has dropped because of the global economy. With interests going up across the board, there has been less money put aside for crypto investments.
Add to that dip in the wider global economy the fact that there have been some very high-profile crypto business failures and scandals. The mainstream was just about coming around to the idea that crypto could be the way to make financial transactions. But now suspicion has crept back in.
Will Crypto Recover?
To paraphrase an old saying, the rumors of the death of crypto have been greatly exaggerated. The value of some major digital currencies, such as Bitcoin, may have taken a nosedive, but we have been here before. There are just more people invested at the current time, so it is bigger news.
The increased uptake of Bitcoin investments and users looking for short-term investments has made crypto a much bigger part of the overall financial picture. This is not as niche an area of finance as it once was. That means there will be enough true believers that will keep with their investments until the markets become a little more favorable.
What Happens Next?
In the short-term, we are likely to see more mainstream stories demonizing cryptocurrencies. That fits in with a particular agenda and will make a lot of people very smug for a while. But that will not stop others from taking this dip as an opportunity to get in at the bottom once again.
Part of the problem in recent years has been the sheer number of people investing because they thought Bitcoin was a slam-dunk investment. Many will have gotten burned and dropped off. But there will be others who have now signed up for owning data for themselves. The Web 3.0 idea has caught on.
Proceed with Caution
Self-regulation has long been an attractive part of the whole crypto lifestyle for many. But it does seem to have been part of the problem when it comes to exchanges failing and currencies crashing. It could be that some of the bigger players will need to allow some kind of greater regulation for the culture to grow.
But the main takeaway from the recent crypto bubble burst should be to try to treat digital currency investments as you would fiat currencies. Expect there to be downturns and not expect everything to be fine all of the time. If you do your homework and know what you are doing, crypto can still have a bright future.