The Great Crypto Shakeout: Is Crypto “Dead”?
If you’re a newbie in the crypto space, then the last few weeks would probably have given you a heart attack no jokes. Earlier this year Bitcoin and the crypto market had been on a massive bullish run with Bitcoin hitting as high as $63,000 in April. It was something outta your dreams. Everyone wanted a piece of that cake. If you weren’t investing in crypto, you probably had some FOMO.
And then boom, comes the fall in May. Following a series of tweets from Elon Musk indicating Tesla would no longer transact with Bitcoin due to environmental concerns, Bitcoin’s price faced a dramatic plunge. As of the time of writing the price of Bitcoin sits around $35,000. It wasn’t just Bitcoin, other cryptocurrencies such as ETH, BNB and several others suffered a huge plunge. It’s certainly no news to you by now. China’s recent crackdown on crypto (again) also contributed largely to this fall.
Some say this is the awaited crypto bubble burst. Many, especially newbies are off to panic-selling and ready to abandon the crypto space.
Is it time to pack my bags and go?
The price volatility of crypto is no strange occurrence to long time traders in the ecosystem. Last year in March, due to the COVID-19 outbreak, Bitcoin suffered a huge plunge, falling below $4000. Yet today, Bictoin trades at well over $30,000. That’s no sign of an asset that’s about to exit, rather one that keeps coming back stronger and better.
The plunge in crypto prices experienced recently, contrary to what many believe, is not signalling the end of crypto. Rather we are witnessing a journey towards stability, growth and mainstream adoption. New advanced technologies are being deployed in the DeFi space to help facilitate growth and scalability. The fundamentals are getting stronger consistently.
More blockchain platforms are adopting the proof-of-stake (PoS) consensus mechanism which is less hectic and faster than the previous traditional proof-of-work consensus mechanism. Ethereum, the second most popular blockchain platform and second largest cryptocurrency, has also initiated moves to transition to a PoS framework. Platforms like Binance, Polkadot, Cardano use this framework as well. And worth noting that it’s far more environmentally friendly than Bitcoin’s Proof of Work.
Cross chain platforms that allow interaction between different blockchain protocols have started growing in popularity helping to facilitate faster trade, easy to use applications and lesser fees. This means real adoption driving DeFi apps across Ethereum, Binance Smart Chain, Polkadot just to name a few.
Also, the current rise in crypto derivatives (CDs) trading which has garnered attention from institutional investors like Goldman Sachs and several others recently lends credence to the fact that the crypto space is far from crashing. On the contrary the ecosystem is only gearing towards mainstream adoption and growth.
The recent bear market is only a temporary downtime, just like in the past, the crypto market will rise again and even stronger. Besides, there are other ways traders are still earning income regardless of the state of the market e.g. yield farming, liquidity mining and staking.
This ain’t time to skedaddle, rather a time to HODL and play the long game. Remember, the only time you actually suffer loss now is when you sell. Stay strapped in, the force is strong with crypto.