The crypto bubble may be about to burst as governments and regulators around the world are stepping up their battles with companies in this industry. In the US, there have been a number of subpoenas issued to those involved in crypto trading platforms. In Singapore, two men have been arrested for an alleged multimillion-dollar bitcoin scam. And in China, authorities shut down one of the country’s largest and oldest cryptocurrency exchanges and banned all new virtual coin offerings.
What are the reasons for the crypto bubble?
Crypto was created as an attempt to challenge financial services and banks and create a new financial system. The idea behind it was to make it more secure and more accessible. It would make it easier for people to send money to other people. It would also be a lot easier to send money and get funding for your business.
But with the current crypto market being so unstable, the system has been failing to deliver. The market is not as big as it was made out to be. A lot of people have been losing money and this has led to a lot of people loosing faith in the crypto market.
Is there a reason to be alarmed?
Yes. But more people are seeing it as an opportunity rather than a challenge. The market is still a new and developing market. It is going to take time for the market to stabilize. If you are looking to get into the market, now would be the best time to do it.
How about the market in general?
For those who have invested in 2019-20, it is a good time to lock in gains and exit. Those who are interested in investing in the long-term should wait for the market to stabilize before making any investments.
What is happening in the crypto market right now?
There has been a great sell off in the past couple of weeks. However, a lot of coins have been in the red for months and some are still in the red. There has been no sign of stabilization.
Why should I be worried? There is a possibility of a crash. A crash will be a long drawn out bear market that will eventually end up with a bull run. This is similar to what happened in 2011, 2017, and 2018. However, unlike those, this one will be even longer and harder to recover from. If you are buying these coins in the hope of a rise in value, you will be waiting many years.
What will happen if the bubble does burst?
I do not know. However, I do know that Bitcoin will fall more than the rest of the coins combined. The reason is that Bitcoin is used as a store of value, not a currency. Other coins are used as a currency to buy goods and services. If Bitcoin falls, it will devalue the rest of the market.
Conclusion: The crypto bubble may burst, but will not cause an economic crisis.
It will likely cause a financial crisis, particularly for those who use Bitcoin as a store of value. In my opinion, this is probably the worst con of Bitcoin.