Bitcoin and the entire cryptocurrency market made headlines when the most recent devastating plummet wiped out a whopping $26 billion within 24 hours. The markets are currently suffering their lowest point in the entire 2018.
Although the prices had consistently shown a declining pattern, nobody expected the fall to explode in such a manner. The Reddit co-founder, Alexis Ohanian, had foreseen the occurrence but believes it will benefit the blockchain industry.
The experts believe that blockchain will bounce back since it has created better, cheaper, transparent, and faster methods of online payment transactions than the fiat currencies. Also, the decentralized nature of the crypto market offers significant advantages that increase their popularity.
Although red is not a favorite color among investors, Reddit co-founder believes that the crypto winter will filter out all greedy speculators. Once the speculators are gone, the blockchain space will realign and eventually incentivize and encourage the individuals who are building to just build and enhance the technology to avert future shocks. He said,
It causes all the greedy speculators to scatter and it realigns and really incentivizes the people who are building to just build.
The crypto market seems to be just letting go of the participants who joined in for the wrong reasons before rising again bigger and better. The sieving process will also ensure that the developers and inventors are duly compensated for their efforts. Moreover, the decline will trim away all tokens that might be responsible for clogging the market and holding it back.
The last time a similar dive occurred, Bitcoin[crypto coins=”BTC” type=”text” show=”percent”] lost ground from above $1,000 to around $250. The winter on that occasion lasted for a few years making investors start losing hope. Nonetheless, Ethereum[crypto coins=”ETH” type=”text” show=”percent”] was developed from that meltdown. It is evident that useful things got developed out the low levels reached during Bitcoin’s last ‘hype’ cycle.
Digital currencies were originally developed to store value. Among the cryptos, Bitcoin[crypto coins=”BTC” type=”text” show=”percent”] and Ethereum[crypto coins=”ETH” type=”text” show=”percent”] are perceived to succeed in value-storage in the long-term. But, nobody knows which crypto will be valuable in the end.
The down cycles are essential for the development of a strong foundation to enable the market to thrive in the next growth cycle.