Digital assets have been a constant source of controversy ever since their inception. Despite their innovative nature and ambitious goals, they have been met with hostility, skepticism, and even downright opposition. Critics argue that crypto is nothing more than a Ponzi scheme, has no intrinsic value or real-world utility, and serves as a playground for criminals. All the negative events that have marked the crypto industry over the years also cast a negative light on this novel asset class. From recurring bear markets and price crashes to bankruptcies and scandals, the crypto market has had its fair share of challenges and obstacles.
By all accounts, crypto should be long gone or at least on the brink of extinction by now. And yet, if we look at the Bitcoin price chart and other major coins, we see that crypto is still alive and well and continues to trade on exchange platforms despite the many ups and downs it has experienced. At the time of writing, Bitcoin was trading at $74,839, while Ethereum was valued at $2,814, with a 33%, respectively 20% increase over the past 90 days.
15 years after its birth, the crypto industry is still in limbo, stuck somewhere between acceptance and disavowal. A lot of people still don’t know what to make of it or how to approach it. It’s true that crypto is nowhere near replacing fiat money or even becoming a viable alternative to it, but it’s still going strong against all odds. Bitcoin is already a legal tender in two countries, and businesses around the world have adapted their financial structures to accommodate crypto payments. This is proof enough that digital currencies are not going anywhere for the time being, but it doesn’t quite explain crypto’s resilience.
The Power Of Blockchain Technology
We should start by pointing out that the traditional financial system is far from being perfect. In fact, it is riddled with shortcomings, from lack of transparency and limited accessibility to the concentration of power in the hands of just a few institutions.
Crypto has emerged as a solution to the inefficiencies presented by conventional finance, with blockchain technology as its foundation. This means that digital assets are decentralized and can’t be controlled by a single central entity. Instead, the power is distributed among nodes across a peer-to-peer network, ensuring safe, transparent, and immutable transfers, as well as easy access by all users.
One might argue that crypto isn’t perfect either, and that is perfectly true, but its vulnerabilities differ from the ones observed in traditional finance. So, even though it’s still difficult to accept crypto as a mainstream form of finance, there’s no denying its potential. Until governments and lawmakers can find solutions that could effectively address current financial concerns, people will continue to turn to crypto as an alternative and hold out hope that digital assets will one day be able to enter the mainstream.
The Power Of Emotions
From a technical perspective, blockchain technology is the reason for crypto’s enduring appeal. But we know all too well that people often overlook technical considerations and make decisions based on emotions rather than reason, and crypto represents a good example in this respect.
Much of the hype surrounding digital assets was not prompted by the technological innovations it introduced but by the staggering rise in their popularity as an investment opportunity and the promise of high returns. Crypto has earned a reputation as an extremely volatile asset class, and the recurrent bull and bear markets have proven unstable time and time again. While volatility acted as a deterrent for some investors, it had the exact opposite effect on others who didn’t think twice before taking the plunge and investing in crypto.
We’ve seen crypto rise from a rather insignificant and odd project to a financial powerhouse in less than a decade. Those who invested in digital assets when the time was right earned fortunes. Others lost their entire life savings by investing in crypto, but that only proves the point that people are driven by emotions, and that’s what helped crypto thrive.
The fear of missing out (FOMO) made people ignore the red flags and continue to pour money into crypto even when the market was plummeting. The industry has experienced several crypto winters already, with the last one being the harshest to date. The dramatic events we’ve mentioned in the beginning caused the demise of a lot of crypto projects and many have exited the market, but die-hard crypto supporters never lost their faith.
The fact that digital assets have been able to weather all storms has fueled people’s optimism and hopes and kept the industry going even in its darkest hours. Market sentiment plays an important role in crypto’s resilience, so digital currencies might be a speculative asset class, but as long as people think they are worth something, they will continue to exist in one form or another.
Obviously, long-established cryptos like Bitcoin and Ethereum have more chances of thriving than new projects, being backed by a larger number of traders and investors. However, other crypto assets will continue to emerge, following closely in their footsteps and taking Bitcoin’s legacy further.
Final Thoughts
Given its rather unconventional and erratic trajectory, it’s understandable that some people are questioning the future of crypto assets, and they’re surprised that crypto is still around. But the fact that crypto has had a tumultuous history and hasn’t lived up to the initial excitement and expectations doesn’t mean it’s nearing its end. It simply demonstrates the unpredictable nature of digital assets and the difficulty of making accurate predictions about their future. Crypto has proven its ability to endure and adapt, and that gives us reasons to believe it’s going to be a part of the picture for a long time.
