What’s the Next Step for Blockchain? Downtrends are Necessary!
Aftermath and Lessons to be Learned
We are already in April, and in the second quarter of 2018, it’s been four months since the cryptocurrency markets shocked the world, yielding dream-like profits and nightmarish losses!
The cryptocurrency market peaked at a combined market cap of $800 billion. With Bitcoin violently rallying from $5,000 to the $20,000 region in less than a month, the pros knew it was unsustainable, while new investors classically bought in the eleventh hour of the cryptocurrency party!
As the BTC/USD trading chart illustrates, Bitcoin is now experiencing a downtrend but is still up over 7x what it was last year. Bitcoin’s downtrend had bottomed out near $5,900 and recently dipped back into the $6,000 region, showing that the cryptocurrency markets may not be out of the woods just yet.
At the height of the crypto mania, there was no rational thinking. The markets would rally based on fake news, and many did not read the whitepapers and didn’t care about the technology they wanted to invest in, and worst of all, the greed allowed fraudulent platforms (such as Bitconnect and USI Tech) to flourish.
As amazing as it was to witness Bitcoin, Ethereum, Litecoin, Dash, and other genuine projects grow and become self-sufficient ecosystems, the market was due for a correction, reflection, and flushing out the garbage.
While the community shifts blame as to why the cryptocurrency markets crashed, a critical lesson and reminder has been given to new and old members of the space alike that what goes up always comes down and the majority of everyone’s favorite cryptocurrencies are speculative, with zero use cases or long-term relevance.
What Does the Blockchain Space Need to Focus On?
With prices and Lamborghinis no longer the primary focus of the community (for now), the attention can now be focused on technological advancements, such as scalability, security, and usability.
As more use cases and real-world applications are used through blockchain technology, the price will not be as speculative and stability will begin to follow. For Bitcoin, Litecoin, or other digital cash solutions to be a mainstream payment option, the price needs a foundation of stability.
Before anyone can benefit from the technology, scalability is the key hurdle to overcome. Protocols such as EOS, Cardano, and the second-layer solution for Bitcoin (Lightning Network) are well underway and are capable of matching the established system we currently use.
More progress on real use cases and technological advancements can influence the price, usually in a positive manner, and depending on how the community responds to the news, the advancement of the technology isn’t the only metric for governing the price of a cryptocurrency, with transaction volume, network costs, and other variables being of influence.
Without real usage at scale, the cryptocurrency markets will remain a speculative industry. If 2017 was the year the world became aware of blockchain tech, 2018 could be the year the world begins to use it.
Disclaimer: This is not investment advice. Please conduct your own research and only invest what you can afford to lose.