Now before we either all panic of HODL our funds I think it’s time to take a step back. I don’t think cryptocurrency is going anywhere regardless of the bad news and government threats.
But with that said let’s take an even further step back and ask what has worked, what hasn’t worked and why has this happened to the market?
There are a lot of factors but I’ll speak about the ones that I think are most significant.
The news is key here because a lot of family and friends are worried that all of us crypto holders have lost all of our money. Even with Bitcoin around the $7-$10K mark, unless you bought in at the end of last year you’re still probably doing very well. In general the market for most major currencies is up well over what it was in the first 3 quarters of 2017. However, there is no denying that the charts look a little bearish but I think there will be a breakout in the coming months.
Much like the news, government and big financiers are having a big impact. We know hedgefund investors have poured in billions. Whether by intention or not a lot of them could be pulling money out of certain currencies to create an artificial crash and panic selling.
Too Many ICO Scams
I used to feel the word scam was used too liberally in the digital age of many honest IT companies. However, in terms of ICO even the Ethereum Founder, Vitaly Buterik says 90% of tokens on his network are scams. This is a very rational reason that will have a huge chill on investment. I would say blame a good portion of these problems on Ethereum honestly. The unregulated and wild wild west of ICOs have brought government wrath and regulators banging on the door of all crypto stakeholders.
Lack of Common Sense and Proper Business and IT Practices
It is very clear to me in looking at how a lot of teams and ICOs operate that a good portion of people holding power in the cryptoworld have no clue. If they did a lot of common sense things would be happening and they simply aren’t.
Such as Coinbase’s decision to open itself and its investors for huge losses and liability by selling Ethereum ERC20 Tokens.
The very idea of “free for all” in the cryptoworld reminds of the 90’s of the wild wild west of the World Wide Web and the lessons I thought we all learned. Admittedly, and clearly, a lot of people have forgotten or were not old enough to be around for that.
I could say more but it’s so clear that essential business and IT practices have been thrown to the wind. This is a huge impact on a lot of the issues the cryptoworld has been facing.
I am still very optimistic about the long-term crypto outcome, but there are a lot of self-created and external factors at this moment. I do think it is temporary but a dot bomb in crypto will certainly be repeated and appear. The currencies and teams who didn’t learn from the 90’s will likely be the first ones swept away, leaving way for the next generation of cryptocurrency that simply just works for people and business.