Cryptocurrency space witnessed the longest crypto winter in 2018, which lasted for almost over 6-months and cut down the market capitalization of major cryptocurrencies by 80%. The longest bearish trend saw many investors and new startups lose the trade market battle, pushing them to the crypto graveyard.
The longest crypto winter might have brought doom for most of the crypto investors and startups who were hoping the prices would climb further up after the miraculous rise in 2017, however things did not pan out the way most have thought out. Having said that, the longest bearish trends were not just about the falling prices and closing startups, it had certain good elements that the majority of the crypto space can rejoice and look up to.
In this article, we will look at various upsides that the crypto winter has caused and how it was good for the cryptocurrency space.
Crypto Winter Cut Down the Price Volatility Significantly
Bitcoin and most of the altcoins were mostly bashed by the traditional investors and critiques for the high price volatility which also stopped them to invest in an entity with such price fluctuation, bringing in a ton of uncertainty and risk along with it.
The recent bearish trends seem to have cut down those price volatility by a significant margin. Take Bitcoin, for example, the pioneer currency which saw its prices rise from a few thousand dollars at the beginning of 2017 to a value of around $20k by December end 2017. Compare it with the prices since the bearish trends in 2018 took over, and you would find out that Bitcoin has been rallying between the $3200 – $4,000 mark for quite some time now.
The price might be quite low when compared to its highest price, but the stability in the fluctuation is quite evident and that is something every crypto enthusiast can take away as a positive of the current bearish trends.
Traditional Investors Make a Foray into Crypto Space
What better measure of success when your biggest critiques turn into an admirer and the crypto winter did exactly that, with the price volatility at an all-time low, traditional investors from wall-streets are looking to expand their portfolio to cryptocurrencies.
In the last couple of months, some of the most traditional investment firms who kept a safe distance from the crypto trade market are opening their gates to avail crypto trading services, crypto hedge fund services, and custodial services to its customers. The crypto winter is definitely the reason but the demand from the customers is also a factor in bringing the crypto services to the traditional forefront.
One of the biggest critiques of Bitcoin, the JP Morgan group has been the but of all jokes, since it announced its own stable coin for its banking use. One of the analysts from the firm came on a news broadcast to explain the reasons behind the firm’s decision to take a U-turn from its critical stance to join on the crypto bandwagon. According to the analysts, the long crypto winter cut down the price volatility by a significant margin, making it easier for traditional investors to look the crypto winter.
The Bubble-like Behaviour is All but Over
Any new technology goes through a cycle of tremendous highs and lowest of lows in the beginning, be it Bitcoin or the dot com boom in the late 90s. Both the phenomenon saw a tremendous rise and then a disastrous fall from the top, before gaining momentum and stabilizing its position.
Bitcoin was valued at $0 for months and rose as high $20k before stabilizing at around $3,500 mark. Many analysts believe that the recent crypto winter played a very significant role in ending Bitcoin’s bubble-like behavior and made it a more reliable entity to trade, use as a medium of exchange and even use as the store of value.
During the longest winter in crypto space, the focus shifted from the price value to the enhancement of the technology and its acceptance. Today, despite the bearish trends the number of vendors accepting Bitcoin is at an all-time high and those numbers are growing exponentially. Today the use of Bitcoin as a medium of exchange is not just limited to some shady online portals, but it has expanded to real-estate, healthcare, and tourism sector, where paying in Bitcoin has become as common as paying in fiat.
Bitcoin’s use as a daily driver is still a far-fetched dream, and in order to achieve that, regulators would definitely play a very important role. The goal of a truly decentralized financial ecosystem could be achieved when people and governments understand the true potential of Distributed ledger technology and come together to work for a common goal.