Bitcoin

Crypto Crash Reality Check a Good Thing For The Industry

Crypto Crash Reality Check a Good Thing For The Industry

The long drawn out bear market of 2018 has been very painful for a lot of crypto traders. However, it may be just the reality check the industry needs in building more stability for future growth.

What Goes Up Must Come Down

When charts go parabolic it is never a good sign for any asset, digital ones included. The unnatural spikes seen on Bitcoin and across most altcoins during the last two months of 2017 should have been a warning sign of what lies ahead. The hype and fervor were palpable with moons and lambos becoming a reality for a lucky few.

The seemingly unsustainable growth had to come to an end at some stage and January 7, 2018, marked that day in crypto land. After reaching a peak market capitalization of $830 billion things started to turn south in a trend that would last the entire year and beyond. In a crash of over 87% crypto markets plunged to just over $100 billion, a low hit on Saturday.

Many have lost out big time after pumping funds into cryptocurrencies only to see them evaporate over the course of the year. The FOMO train was a hard one to disembark and hodling seemed to be the only option unless prepared to sell at a loss. Channel News Asia spoke to a few traders who were mostly in regret at the moment.

“Crypto is already so cheap. It doesn’t make sense to sell something so cheap and buy something else,” one said. “Of course I look back, I regret it, but there is no way for me to undo that,” added another.

The big purge will be painful for many but it may not be that bad a thing for the ecosystem as a whole. US regulators have been the catalyst behind a lot of the selling pressure as have a number of high profile exchange hacks and ICO scams.

Regulation, however, is needed in moderation to weed out the bad actors and bring a little stability to the industry. Parabolic charts and pump and dump schemes are not conducive to a healthy trading and investing environment. Lower volatility is also far better for the general adoption of cryptocurrencies in daily life.

The focus should no longer be on price but on what the technology can achieve, as suggested by David Lee, a professor at the Singapore University of Social Sciences;

“Prices coming down is a very good thing for the industry. We should not focus on the price. It’s always a cycle … People need to refocus on how much can this technology do, and the answer is a lot,”

Industry leaders such as Binance CEO CZ shares this opinion and has adopted a ‘buidl’ attitude with a focus on developing the technology so that it can serve its real purpose.

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