Bitcoin has fallen from its peak from 20000 dollars to below 4500 dollars with some predicting prices to fall well below 2500 dollars. Other altcoins are not doing any better either. Usually, when this kind of fall in price is experienced in any other market, investors generally panic, resulting in a race to the bottom. Despite the recent volatility experienced by the crypto market, most enthusiasts still remain very optimistic about the future and are betting on blockchain as the next big thing. Up until now, only a handful of real-world use cases of this new technology have been implemented successfully, the most famous being ICOs(Initial Coin Offerings). Once blockchain is mainstream, the possibilities are literally limitless.
This is because once people have mainstream access to blockchain domains, no one can currently envision what innovations would be built around it. Similar to the internet during its infancy, no one knew what could be done with it. Yet, once common masses had access to it, every aspect of their lives from shopping to socializing have been seamlessly migrated on to the internet. Once the access to this domain has been achieved, the solutions it can bring about are limitless. Some investors are confident that their bet will pay off one day.
What does the future hold?
One real-world use case of cryptocurrencies that has actually shown success is the ICO, aka the Initial Coin Offering. There are some use cases which are better suited for blockchain than other types of technologies and frameworks. An application that generates too many transactions or needs to work on a huge amount of data is not suitable for blockchain, due to its current scalability issues. Asset management has a good future with blockchain as it will make things much easier. It will result in lower costs, less paperwork and for the first time, any asset can be tokenized and sold off as parts to many people around the world.
The Real estate wing of DRW is doing just that on one of its properties, a student tower in University of South Carolina’s campus. Similarly, many are just starting to explore the possibilities that crypto holds. Some of the fields that are going to be affected are retail, real estate, government, insurance, etc. We have already seen Dubai and the United Arab Emirates government adopt blockchain into governance and others will follow suit. Most governments will have to wait and see how this experiment will turn out before rolling out their own schemes.
When will crypto turn bullish?
It is no secret that cryptocurrencies are experiencing a bearish market now. So, if crypto holds this much potential, then why are prices falling? Amazon’s stock prices were soaring during those years when the company was making big losses. Why? The investors speculated that the company will turn profitable one day. Why is this not happening with Bitcoin and other altcoins? Volatility and lack of regulation are some of the reasons. It will be hard for anyone to invest without taking big risks and investors want to avoid risks at all cost. For many, it still doesn’t make sense to invest into this relatively new and immature market where one day, all your investment could theoretically go to zero. This is especially true when it comes to hedge fund managers and other financial institutions who are answerable to their clients.
Regulations can bring about some relief to this situation as it can bring stability and accountability which boosts investor confidence and increase capital inflow to the market. But with regulations comes some concern. Will it affect the core values and properties of cryptocurrencies? Will regulation make this groundbreaking technology less attractive and vibrant to a point that it becomes just another fancy tech term? Or will it usher in a new age of confidence taking it mainstream? Whether it be retail or real estate, crypto will disrupt many industries in the coming years and those who are going to be a part of it will make big money. This is actually what makes the investors confident and why they are still betting on crypto. It is a very turbulent period for cryptocurrencies in general. But one thing is for certain. Cryptocurrencies are here to stay and how it will evolve, how it will look like ten years from now is something we will have to wait and see.
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Disclaimer: The authors of this website may have invested in crypto currencies themselves. They are not financial advisors and only express their opinions. Anyone considering investing in crypto currencies should be well informed about these high-risk assets.
Trading with financial products, especially with CFDs involves a high level of risk and is therefore not suitable for security-conscious investors. CFDs are complex instruments and carry a high risk of losing money quickly through leverage. Be aware that most private Investors lose money, if they decide to trade CFDs. Any type of trading and speculation in financial products that can produce an unusually high return is also associated with increased risk to lose money. Note that past gains are no guarantee of positive results in the future.
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