The Biggest Threat for the Crypto Industry
In the series of tweets, Donald Trump said he is not a fan of digital currency because it is based on ‘thin air’. After he denounced Bitcoin, the cryptocurrency with the highest market cap, citing its volatility and lack of dependability, the price of Bitcoin dropped for more than 25% and keep falling.
Trump also criticised Facebook for its initiative to launch its own cryptocurrency: “If Facebook wants to be a bank, it must become subject to the banking regulations, like other banks” Trump twitted. The tweets of the president were alarming for the entire cryptocurrency sector, causing great resonance among experts — some of them expressed the opinion that it is not only a drop in price but also could be a signal for the new wave of regulatory scrutiny.
The future of the cryptocurrency now depends on how the cryptocurrency ecosystem will be able to evolve and improve. Let’s briefly look at the history of cryptocurrencies to understand what crypto projects can improve to easily deal with such issues in the future.
Now cryptocurrency world includes over 3000 digital currencies (altcoins) and is continue expanding. Bitcoin was the first cryptocurrency on the market. Bitcoin has always had an impact on the other altcoins in terms of valuation: the cryptocurrency market has never stood still: prices go high and then drop. But Bitcoin has a significant issue — its price is not based on a real value, there is no real economy behind Bitcoin.
Altcoins are much dependable on Bitcoin price shifts as they declare the products / services based on blockchain but very little number of such projects created working products or services. So, their coins are not backed by any real value, which is the biggest threat for the entire crypto industry so far.
Decentralized projects are bound to connect the world, but to make it work, teams should link the price of their coins to the blockchain-based products and services. As soon as the tokens are backed by real value, they will become immune to any price waves, caused by public discussions — as they will represent real value. This is the only way for the cryptocurrency to curve the path as the future of finance.
