The current pessimistic crypto market sentiment has raised several questions about the actual cycle of the industry. Many people still believe that the market will bounce back to relive its glorious past circa December 2017, and are still holding on to their coins. The not so optimistic ones have already lost their life savings and have given up on digital currencies altogether.
It’s not hard to fathom why people would have wanted to invest their savings and even borrowed money in a booming $800 billion industry. However, the market has plummeted more than 75 percent in capitalization since then, and has raised serious red flags in the eyes of the mass with regard to cryptocurrencies.
Path to Financial Ruin?
Cyclical bulls and bears are a quintessential feature of every industry. Even a tried and tested value of store like gold had to go through volatility during the mid-twentieth century. However, no industry in the entire history has had to go through such a rollercoaster ride like the crypto industry.
As per Coinbase, the premier crypto exchange in the United States, the number of customers registered with the exchange doubled within a span of 6 months, from October 2017 to March 2018. This points to the level of euphoric state the investors might have been in at that point of time. Of course, the market has crashed massively since then which makes it easy to determine that a good chunk of the current coin holders might be under immense financial distress.
Magnified Damage in the Far East
Countries like South Korea and Japan are speculated to have faced the major brunt of the current bearish sentiment of crypto markets. It must be stressed that before last year’s crypto boom period, there were not enough developments or initiatives being taken in the crypto world in Asia. Hence, it makes sense to assume that majority of the crypto investors entered the market while it was already shooting off the roof, not exactly the best of times if you’re an investor.
It won’t be wrong to blame the ICOs for the anguish crypto investors bear towards the market today. The industry is plagued by rampant ICO exit scams, where a tech company raises millions banking on a technical and sophisticated white paper, and dupes investors of their money. This leave the coins held by the subscribers devoid of any value whatsoever.
All is Not Lost
However, the current market phase looks far from the end of the line. Major enterprises such as Facebook and Starbucks have been constantly trying to penetrate the crypto space with large investments in research and development and recruiting the best technology savvy minds.
Blockchainreporter reported on August 15 that Joseph Lublin, co-founder of Ethereum does not expect the current trodden crypto market to hamper the industrial development.