Seen as a risk-on asset, cryptocurrency is being ditched by institutional and retail investors alike as world markets melt down. Many from traditional finance are looking on with relish, and many are thinking this is the end for crypto. However, crypto has weathered similar storms before, and this is likely to be no different.
The total collapse of the Terra Luna/UST ecosystem, coupled with bitcoin and the entire crypto market taking some pretty hefty losses, has led to many market pundits writing crypto off, and some suggesting that it could all go to zero.
It probably needs to be acknowledged that indeed most cryptocurrencies are going to have trouble surviving the current rout. However, most cryptocurrencies were only there really for a wealth grab when times were good.
There are gems amongst this space though, and given fair and supportive regulation, the likes of some of the big layer one blockchains, and cryptos that have real-world utility, are going to survive and thrive, especially given that some of the technologies that come with them are truly disruptive.
Just like in the beginnings of the dotcom era, many of the companies that didn’t have the right team or technology behind them were cleaned out, allowing the truly disruptive companies such as Amazon, Google et al to thrive and grow.
Bitcoin is the undisputed flagship of the cryptocurrency sector, and what it has does not exist in the world of finance. It offers a totally secure, and hard asset that will not depreciate in time. A reliable store of value that no government can manipulate or stop because it is completely outside of the fiat banking system.
It has been severely battle-tested through its short life so far, and has always emerged stronger and more resilient than ever. There will be a huge demand for it as fiat currencies continue debasing and hasten their descent to zero.
Yes, price can drop in the short term, but for such a scarce asset, the demand is going to rip through the roof, and that time is approaching within the next year or so.
Certain other cryptocurrencies will follow it and the world order will change because of them. Investing is mainly for the future, and those who purchase the right projects into the depths of this bear market will rise out the other side far stronger.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.