With the encouraging news of the bullish price reached by Bitcoin and Ethereum last weekend, we will analyze what is the future that we can expect in the cryptocurrency market.
Last Monday we once again felt an encouraging optimism in the sector, which hopes to recover after the sharp falls suffered this year. With these ups and downs may you be wondering what’s going on with Bitcoin and crypto? Well, in a few words, Bitcoin managed to be close to being worth USD 70,000, suffering a drop below USD 20,000 in June this year. Today, the value of the most well-known cryptocurrency is reaching USD 22,500, while Ethereum (ETH) managed to be close to USD 1,500. Their combined efforts meant a 4.8% boost for the entire cryptocurrency market.
This year we have experienced a series of events that have called into question the integrity of the crypto ecosystem and Web 3.0. We talked about the LUNA crisis, the problems that have been generated due to the lack of liquidity of Celsius and the fear of recession that is causing investors to withdraw capital from high-risk.
The volatility and skeptical news towards the entire crypto ecosystem are familiar to those who know the market. But to fully understand what’s going on with Bitcoin and crypto, you have to know the context and understand what gives rise to cryptocurrencies’ value and why their price has been falling for several months.
We have to remember that Bitcoin emerged as an alternative digital value, after several failed attempts to create a global currency. After the bad experiences in the banking sector, caused by a system that does not have stable characteristics, it is not surprising that Bitcoin attracts the attention of several investors.
Will cryptocurrencies still have value in the future?
To be able to answer the question, we have to understand that it depends on many factors, mainly on what happens in the world while the users of your network are maintained or increased, which are the ones that give it value. To put it very simply, if there are users who believe in the value of cryptocurrencies, they will have value in the future. This is why the importance of the crypto community is always talked about, since in the end its value depends on the strength of its community.
What can we expect from cryptocurrencies in the short and long term?
Well, in the short term it is difficult to be precise considering that we are in a bear market, with a lot of uncertainty and a lack of liquidity. But if inflation continues at its current rate and the market continues to believe in the potential of cryptocurrencies, decentralized finance and the cashless world, it stands to reason that the price will rise in the long term.
The crypto world is very similar to the startup world, where few companies get ahead and the vast majority fall by the wayside. Some Web 3.0 actors have launched great marketing campaigns, with some fraud, obtaining financing by convincing capital that it has an unreal value. Unfortunately, this has done great damage to the sector and the entire ecosystem.
It is expected that if the market reaches a certain maturity, an independence between the currencies of the market will be generated and in which the fear outside of Web 3.0 will not lead to a global fall. Currently the crypto market is still in its early stages, volatility is one of its most attractive and at the same time most questionable components. As long as there is uncertainty in the market, the riskiest bets will continue to be for investors with that profile.
Time will show whether the bottom will have been reached, as global circumstances are unique and the future uncertain. However, it is clear that Bitcoin and the crypto ecosystem, as long as the problems of the current economic system are not solved, will be a bet, with more or less risk, but with an undoubted advantage for those who believe in the new digital age against the more traditional assets.
Crypto companies that intend to grow by acquiring long-term users must comply with two fundamental pillars. On the one hand, they must offer users a solid and attractive proposal, and on the other they must develop growth strategies through user acquisition.
Lychee and the content of this article doesn’t have the intention to give financial advice of any kind.