One of the big concerns that many people have regarding crypto right now, is that we are going to see a repeat of what happened in 2017/18. Much like what we saw at the back end of 2020, crypto prices shot through the rood in 2017, making many people very wealthy indeed. As more and more people got on the train however, a bear market rolled around and prices plummeted rapidly. Experts like Robert Testagrossa are aware of what has happened in the past in this market, but not all of them are greatly concerned about the possibility that a repeat may be be possible, and here is why.
Getting on Board
Back in 2017, and even as crypto was shooting to the moon, so many of the world’s leading companies and financial institutions refused to accept crypto. This meant that the market never got the backing and support which it needed and it added greatly to its volatility, and its eventual plummet. This time around however we are seeing some of the world’s leading companies get on board with crypto and that has helped the market to solidify. From retailers like Tesla to financial giants like Visa, PayPal and even New York’s oldest bank, everyone is getting involved this time around.
Another great criticism of cryptocurrency used to be that it wasn’t possible to actually spend it, which made many question what the point was of having a currency at all. This of course was a very fair point, yet these days you can most certainly spend your crypto. We have seen towns in Japan move to a 100% cryptocurrency spending approach, we have also seen cities like Miami enable citizens to pay their taxes in Bitcoin. Little by little things are changing and that is only good news for cryptocurrency.
What people don’t tell you about that famed bear market back in 2018 is that it was largely the result of an enormous Chinese hack which took place in the July of that year. This hack ended up taking billions of dollars worth of Bitcoin in one fell swoop. This not only altered the price of the currency but put the fear of god in investors around the world, which thus resulted in the prices completely plummeting. Whilst not impossible, there is far less chance of this kind of thing happening again thanks to the larger array of security protocols which are in place for crypto wallets and holdings.
And finally there have been many lessons learned from the past which should give more stability to this market. Now people are looking to buy dips in price, which gives many cryptocurrencies the stability to hold a certain price resistance.
There are never guarantees of course, in any market in fact, but we can be confident that the rapid decline in prices that occurred in 2018, is largely unlikely to be seen again.