There is a lot of talk declaring Bitcoin a lost cause and that a total price collapse is inevitable. Peter Mallouk, President of Creative Planning Inc called it a “dead man walking.” Others say that it is “on the brink.” Most critics speculate that the price of Bitcoin will go to zero and will not recover. Understandably, all the FUD is wreaking havoc on the price and volume of the crypto market. At the same time, all the criticism is not convincing. Quite the contrary; it seems more a desperate attempt to inflict some form of mortal damage to Bitcoin’s reputation than actual facts. As if deep down critics know that realistically speaking crypto cannot fail and they know it. And here are a few reasons why they may think that.
Crypto currencies propose to solve a variety of real world problems like inefficiency and rising costs. And a lot of projects have made a number of breakthroughs in their industries. For example VeChain is a leading solution in the battle against counterfeiting and logistics. Ripple, OmiseGo, and Stellar seek to reduce the costs of remittance and transfers. Debitum is creating a new way to fund small and medium enterprises (SME) through borderless lending. And Neurochain promises to unlock the power of AI. These are but a fraction of the projects with valid concepts and constant progress. And while these projects remain relevant, they provide real value in return to their ICO investors.
The second reason Crypto will recover is adoption. Institutional investment is building the infrastructure to make crypto currencies mainstream. Everyday companies file patents for point of sale, storage, metrics, and trading patents of crypto. This will make crypto ubiquitous to consumers and speed up adoption.
The new influx of stablecoins will provide much needed liquidity and stabilize prices. Also, regulation will curb manipulation; the recent show of force by the SEC will cut the number of malicious actors in the industry. And it will provide a new sense of confidence in the market.
The consensus among venture capital investors is that Bitcoin is a viable long term investment. Unlike critics, billionaire investors like Elon Musk, Mike Novogratz, Jack Dorsey, Tim Draper, and others, understand the long term potential of Bitcoin as a global currency. And they are not dissuaded by short term prices and bear cycles.
Lastly, the crypto community is too involved and committed and is not buying into the negative rhetoric. Instead many supporters are coming out putting out the fires of Bitcoin’s “Death Spiral.” They debunk this theory by citing miners’ access to cheap electricity, the temporary shutdown of mining rigs, and the oversold market conditions. All these factors combine to make mining Bitcoin profitable even during the harshest winter. Ultimately, Bitcoin may be down but once adoption kicks in, demand will once more make it an attractive store of value and prices will moon!