Everybody knows that 2018 was a hard year for cryptos. However, some people are affirming that it was not essentially a bad one.
Most traders and businessmen would disagree, of course, but a new article published by NewsBTC calls the bear market a “reality check” and affirms that there is something good for the crypto industry when the prices go down.
Up And Down
According to the article, which was written by Martin Young, charts going parabolic is a bad sign for any market and the unnatural spikes that Bitcoin had amidst the end of 2017 should have been a warning for all investors and altcoins.
He defends the idea that the hype of the market was too high and that only a lucky few cashed out before the market basically exploded and it became unsustainable, which has caused the Bitcoin market crash.
As soon as 2018 started, the market started to go down as fast as it went up. In a whole year, almost all of the progress in terms of price (but not technology and structure, mind you) was undone. A market cap which was as high as $830 billion USD once is now only a bit over $100 billion USD.
The crash led to something called Fear of Missing Out (FOMO) and many investors, despite seeing how the market was going down, continued. This has led them to lose even more money, which only aggravated the crash.
Bitcoin seemed like a miracle in 2017 and, indeed, it kind of was. It was a bubble created by hype, a vision that both I and the original article writer share. Cryptos were never meant to go up so fast, so the fall was very grave.
While the “big purge”, as it was defined by Young, was (and continues to be) painful for most investors, he believes it may not have been bad for the ecosystem. He affirms that many people sold tokens because of the regulators in the United States, however, some regulation is needed for any market.
The author seems to believe that too much regulation is not a very good thing, but he indeed defends that the market needs to weed out the bad actors in order to get stability. Only when the parabolic charts stop and the pump and dump schemes end the volatility could be lower and help in the general adoption of cryptos.
At the end of the article, David Leee, from the Singapore University of Social Sciences, is cited affirming that pricing down can be good because the price should not be the focus or people will be trapped in an endless cycle in which they tend to forget that the most important aspect is technology, not price.
Most of this is true. The bear market was indeed unfortunate, but there was no way that the crypto prices would just keep going up so fast forever. Markets need stability and only speculators are able to win when there is no stable environment for trades.