Cryptos Continue to Lose Value, Will the Market Rebound?
Cryptocurrencies continue their downward movement and although Bitcoin has bounced slightly over $6,000, it is far down where is was 2 week ago. Ether stands at $267 at the time of this writing, well down below what has become the norm.
So should we start to panic? Maybe the naysayers were right all these years? Perhaps cryptocurrencies will just fade away?
While the current market values are a bit scary, cryptocurrency prices are still higher than they were a year ago. That being said, cryptocurrency veteran Ted Rogers of Xapo warned on Monday: “90%+ of CoinMarketCap list will disappear eventually — might as well happen now.” This is an ominous outlook and with Ethereum losing 40% of its value over the last three months, one may be inclined to believe him.
Now let’s keep in mind. Cryptos are not the only thing getting a serious smack right now. Emerging markets are getting walloped. When investors sense a tremendous amount of market risk, they pull back. Cryptos are still considered a risk due to their volatility and this has hampered their long term stability and growth.
The truth is though, Rogers may very well be right. Yet, despite the ominous outlook this is not a bad thing. I remember a few years ago, when I was advising a number of equity level crowdfunding platforms that I was surprised on how easy it was for them to put up a platform and raise seed capital. Most of these companies don’t exist anymore. All innovations go through periods of growth and retraction. Cryptos are no different.
I believe we are witnessing a similar bubble bursting for cryptos now. Cryptocurrencies are here to stay, but the ecosystem needs a serious course correction in order to attract mainstream investors.