Is Crypto Winter Coming again?

WINTER IS COMING! And so is the crypto bull run. At least that’s what the history has been from the last few years. The Bear market through the year witnesses the big new investors Buying in and just playing the waiting game for the yearly hype to kick back in at the right time.

Here’s how the commentary from an episode of “Game of Cryptos” might look like:

“They’re at it; Bitcoin has done it again leading the bull rally. It’s being followed by a huge FOMO propagated through non-stop media coverage, countless analyses and expert opinions, twitter explodes and new stream of investors comes in.

Mass euphoria prevails creating more hype and the self-proclaimed crypto experts come out of their shells. Bitcoin’s price somewhat “stabilizes” and a handful of solid altcoins rally behind.

The frenzy continues. Top altcoins “somewhat” stabilize, also reaching new all-time high.

Now the notable figures come out and talk about blockchain and crypto not being just about money as the prices start to stabilize.

Hype fades away as media slows down. Naysayers come out and warn people the “dangers and risks” involved when investing in cryptocurrencies because they have nothing else to say.

HUGE Correction starts and all the cryptos start trending down.

PANIC SELL!

Crypto Depression: A lot of angry people in this state who become impatient and turn to bitching at ICOs and teams.

REPEAT!!!”

In its nascent stages, everyone wondered if it was going to be the next big revolution or if it will just become a bubble. Cryptocurrencies have come a long way ever since. Today, we’ve arrived at a point where cryptocurrencies cannot be overlooked. For example, CME and the CBOE have all launched their cryptocurrency futures and every publication out there that matters is talking about it, and even the CTFC and SEC have got involved.

All the above signals towards one thing- cryptocurrencies are here to stay, and for a long time to come! It begs one question though- what trends will steer the cryptocurrency landscape in the near future? Let’s have a look

Stable markets and Stablecoins

From exchange hacks, SEC involvement, ban on ads by social media giants, to government interventions- cryptocurrency markets have survived a lot of storms. All the above resulted in a massive correction in the cryptocurrency market from its all-time highs of USD 850 billion in January. It was when renowned experts declared the demise of cryptocurrency.

But it didn’t perish, even though experts forecast that the stablecoin Tether could finally forecast the death of cryptocurrencies. The idea behind it is to have a coin with a fixed price that isn’t subject to volatility faced by most cryptocurrencies. To guarantee its stability, the stablecoin is pegged to fiat currency.

Tether is one the most notable of all stablecoins. Tether’s USDT which is equal to one dollar is now paired by most exchanges to all the major cryptocurrencies. As it is backed by the dollar, securing a cryptocurrency to Tether makes the coin more stable. However, it has been speculated that Tethers are printed whenever the need arises in response to market conditions for the manipulation of the price of Bitcoin and other cryptocurrencies.

Another allegation is that almost 48.8 per cent of Bitcoin’s price surge happened due to the release of new Tethers. The high dependency on Tether would mean that any questionable activity could send the process of cryptocurrency crashing. Good news is that the introduction of more stablecoins will potentially diminish the after-effects of any manipulation through Tether.

Cryptocurrencies set to rule the masses

UK-based Crypto Facilities was in the news for launching regulated Ethereum futures contracts. Goldman Sachs is planning to launch its Bitcoin futures trading. While some experts are of the view that the launch of futures will lower the value of cryptocurrencies, researchers, on the other hand, believe that in the past introduction of futures helped in the adoption of cryptocurrencies. In fact, a recent study by the Federal Reserve Bank of San Francisco revealed that the launch of futures helped encourage the pessimists to join the cryptocurrency wagon. As more and more investors come to terms with the volatility of cryptocurrencies, they will become less volatile and more mainstream.

Bitcoin to stay a dominating force

Without a doubt, Bitcoin is the king of crypto, yet it has been eroding in value since past few months. Despite the sharp decline, Bitcoin is only slated to go up from here. It is estimated that the dominance of Bitcoin will increase up to 50 per cent or more in the near future. This rise will be due to the fact that despite its volatility, Bitcoin has been more stable than other cryptocurrencies like Ripple and Ethereum. Apart from this, many scaling issues that ail the dominant cryptocurrency are being addressed with fixes such as Lightning Network and SegWit.

Upsurge of decentralized exchanges

It won’t be long into the future when decentralized exchanges will witness an upsurgence. Factors leading up to their mass adoption include the fact that centralized exchanges do not really serve the selling point of cryptocurrencies, which is, decentralization. Secondly, with cryptocurrencies becoming mainstream and many witnessing the adverse impact of centralized exchanges in the crypto landscape, for example the Coincheck hack, Mt.Gox hack, etc., there will be an increased drive towards decentralized exchanges. More adoption will be driven by major players entering the decentralized exchange business. For example, Huobi has recently announced plans to invest about USD 100 million towards building its decentralized exchange.

All these developments indicate a more stabilized crypto space with lesser volatility but you never know, if this will be the Global warming of Crypto or just another year of cold long winters with the same unpredictable characteristics filled with emotions of Joy, Happiness & Euphoria followed by Anger, Sorrow & Despair.