After riding the late 2017 and early 2018 highs, the crypto investment community now faces the consequences of overblown hype and security issues, as they wait on Wall Street to adopt the digital currency market. Many crypto enthusiasts reject the comparison to the dot-com bubble burst, and BTC bulls continue to carry out an optimistic line of thinking, still making lofty Bitcoin price predictions $10K and beyond for January 2019.
The CoinMarketCap value of the top cryptocurrencies was once at almost a trillion dollars when the market was hot to trot. Now, the top 100 cryptocurrency market cap limps in at $188.5 billion, dangerously close to its all-time low of $187 billion. Many big investors had voiced their skepticism from the very beginning, even when Bitcoin was booming. The famed billionaire Warren Buffet reminding investors that Bitcoin isn’t designed like a traditional stock investment.
The 80% drop has now statistically surpassed the dot-com 78%, 2008 Nasdaq crash. However, the idea that Bitcoin would become the “digital gold” of the cryptocurrency market that would revolutionize all industry isn’t entirely off-base. It is the momentary bubble created by that hype and vision specifically that contributed to the crash.
There are pockets of whale conspiracies theorists claiming the Bitcoin crash has nothing to do with Wall Street’s hesitancy or a bubble. Many believe that there is backdoor market manipulation and suppression brought to you in-part by whales and experienced future traders. Huge price drops without trading volume increases point to a mass sell-off as the culprit.
Just like the Nasdaq did eventually recover and reach an equilibrium and the internet has been here to stay, it is popularly believed that Bitcoin and all cryptocurrencies will follow that same trajectory. Bitcoin has in the past rebounded from similar crashes, and will likely recover one day again as blockchain technology is the next irrevocable stage of innovation known as Web 3.0.
The crypto crash does not prove that blockchain technology is not revolutionary. It also doesn’t make a case against distributed ledger technology’s projected future as a ubiquitous part of everyday life. What the crash does emphasize, is that economic interest in a new technology that exceeds real-life usage and value creates a volatile market environment that rests largely( if not entirely) on excitement. This market will have high-highs followed by even lower-lows. It will balloon like a bubble and pop like one too.
Value cannot be faked for a sustained period by sheer anticipation alone, especially when the bubble is being continually hit with setbacks like the SEC rejecting 9 Bitcoin ETF proposals or Goldman Sach’s announcement to roll back its cryptocurrency trading desk plans due to instability. Whether premature enthusiasm or a whale-orchestrated mass sell-off caused the crypto crash, the SEC stepping in will serve as a solution for both. It will regulate to prevent a future sell-off while simultaneously restoring hope for full-on adoption.