In the year 2017, cryptocurrencies truly made their mark. Going from a relatively unknown technology that only a few elite minds and nerds understood, cryptos became a household name in which everyone was interested. The number of Google searches for ‘What is Bitcoin’ quadrupled in the last month of the year as people sought to learn more about what this revolutionary technology was. Everyone was interested in the technology and the impact it could have on the financial industry, right? Wrong!!! What got everyone’s attention was the unbelievable price rise.
It’s All About The Money
While the blockchain technology that underpins cryptocurrencies is revolutionary and could change many industries for the better, it wasn’t what got most people’s attention. The unprecedented rise in the price of almost every cryptocurrency last year was what made the world turn its eyes to the crypto industry. The returns for those who had invested were crazy, with some currencies such as Ripple’s XRP rising by over 30,000%.
With cryptos proving to be a better investment than anything else has been for a very long time, people were all too eager to invest, and this only served to drive demand and prices even higher. Many investors were not aware of just what cryptocurrencies were, why they were developed, or what challenges they were solving. This is evidenced by the large number of crypto scams that took place in the year 2017. When many investors were presented with a crypto project that promised huge returns, they didn’t bother to investigate it any further and were more than willing to invest their hard-earned money. This investment fever reached its climax when people invested in a crypto that was named Ponzicoin. The project even described itself as the world’s first legitimate pyramid scheme, and yet people still invested. This is by far one of the clearest indicators of just how little most people understood about crypto.
The fever worked out for some, however. Many who invested in crypto in 2017 reaped big rewards, with some even buying Lamborghinis with their ‘Bitcoin millions’. The market was expected to get even hotter in 2018, but unfortunately it hasn’t, and most cryptos have shed half their values. While the market has shown some signs of recovery in recent days, it is still way off its record high.
The Truth We May Not Like
The recovery should not be misinterpreted as meaning the market is finally maturing, as it’s still a long way from maturity. The unfortunate truth is that the crypto industry is still struggling to find stability a decade after its birth. A sizable number of crypto investors look at this as a quick way to make money. This group of people is possibly even higher than those who understand the real-life problems being solved by cryptos, and therein lies one of the biggest issues. This group of people would not think twice about selling every last coin if the prices started going down – after all, they only came for the money. This group of people is easily thrown off by the slightest negative news. (Remember when Google banned crypto ads and Bitcoin’s price fell by around $1,000 in a few hours? Exactly.)
The true crypto believers understand the technology, the applications, the teams behind their favorite cryptos, and the use cases. Ripple’s believers understand how it’s easing cross-border transfers, Ethereum’s believers understand how smart contracts are automating previously tedious processes, Monero’s followers understand the value of privacy, and so on. They are not easily swayed by the banning of crypto ads, the crackdown by the SEC on crypto exchanges, the banning of ICOs in China, or the fact that Warren Buffet called Bitcoin a bubble.
Those people in it for the quick cash will slowly be weeded out as the market matures, and there will come a time when those holding the coins will be the true believers. This may take some time, as the market is still volatile and prices will keep rising for the foreseeable future, but it will happen eventually. Cryptocurrencies that don’t solve real problems will also be weeded out, and the ones that remain standing will be those that are making life better, more convenient, more efficient, more cost-effective, and faster.
In the meantime, hold on tight to your cryptocurrencies, because they are going to rise to unbelievable heights this year.