Cryptocurrency: lives or dies? Part 1

[TRIDENTG]

Part 1. Bubbles as a scarecrow for newcomers


The cryptomania 2017 was colossal. Although cryptocurrencies have existed since 2009, many people found out about them just in 2017, against the backdrop of the outstanding growth in rates and a clear sense of revolution. Many newcomers thought that the rates would grow forever. They were ready to buy digital currencies at any price considering any declines to be local, and growth to be global.

But 2018 brought an unpleasant surprise: the market suddenly began to break down. In the first quarter, many people hoped that this was only a “correction,” but the collapse continued. If early in 2018, Bitcoin (BTC) carried a record price of $20,000, then by September it had fallen in price to $6,300, that is, threefold. And the “heroic” ethereum (ETH), which almost surpassed BTC in terms of capitalization in Summer 2017, had fallen fivefold: from $1,300 to $250.


In autumn, the market froze. It seemed that the bottom was reached and the restoration would begin soon. However, November brought another surprise: the rates dropped again. For example, BTC fell in price from $6,000 to $ 4,000. This happened so suddenly that it looked like an evident conspiracy of the major players, so-called “whales”. Autumn investors, following the earlier ones, suffered losses. Many of them completely become disillusioned with the crypto-market, having decided that it is entirely in the grasp to manipulators: such a “market” resembles MMM where quotes are randomly set by puppeteers.

In Winter, the market froze again, while in Spring a long-promised growth began. In March it continued to ascend carefully, and in April it continued to ascend unexpectedly sharply and symmetrically to the drop in November. In both cases, the BTC rate changed by $800 just for an hour, but in November it was a drop, while in April it was a rise. In both cases, there was no kickback: on the contrary, the movement went on. Optimists rushed to buy cryptocurrencies, but the most population smelt a rat. If not only drops but also rises occur "in a snap", is this not the best proof of pulling the strings?

 
So do we believe in true market recovery now?  Perhaps this is another trick? Is it worth investing in cryptocurrencies or is it better to forget them like a nightmare? Is the market entirely in the hands of puppeteers or does it have objective laws? We will try to understand this in more detail.

How did it get started: bitcoin and its bubble 2013

The first world’s cryptocurrency was Bitcoin (BTC). It appeared in 2009 and firstly it was known only to specialists in cryptography, as well as to particularly advanced free market activists. But soon it attracted the close attention of investors demonstrating in 2010-2013 a tremendous growth of 4 orders: from $ 0.1 to $ 1000. In other words, the average exchange rate grew by a factor of 10 per year (!!!)

 
In 2013, this BTC’s success gained worldwide fame. However, as often happens, the shock popularization was no in favor of the asset rate: reaching a record mark of $1,200 in December 2013, BTC began to fall in price. Towards the end of 2014, its rate rolled back to $250, following which it remained relatively stable in 2015. A significant part of the growth in 2013 turned out to be a bubble. However, after blowing off the bubble, the BTC rate still remained significantly higher than it was early in 2013 (especially, in all previous years).

 

How it continued: altcoins and general market bubble 2017

The new growth of the BTC rate began in 2016, and became especially explosive in 2017. At the same time, altcoins, new cryptocurrencies, “alternative” BTC - ethereum (ETH), lightcoin (LTC), emercoin (EMC), and many others asserted themselves in a massive way. If until 2016 they stayed in the deep background of the market flagship, then in 2017 their total capitalization for some time exceeded the capitalization of BTC. In Summer 2017 there was a moment when the ETH acting alone nearly advanced the BTC.


By the end of 2017, BTC had risen in price to $20,000, while the total capitalization of the cryptocurrency market reached a huge amount of $800 bln (higher than capitalization of any global corporation). But this turned out to be yet another bubble: throughout 2018, just as in 2014, the rate of BTC and other currencies was falling). By the end of the year, the market capitalization decreased to $130 billion.

What can be shown by the comparison of two bubbles

Financial bubbles constitute an unpleasant phenomenon, and yet a logical one. By studying their dynamics it is possible to reveal a lot of interesting things about the nature of the new assets. If we look attentively at the figures, it is possible to note: the bubbles of 2013-2014 and 2017-2018 have much in common.

⦁   In both cases, the rate of bitcoin has dropped approximately five-fold. Market capitalization in the second case has dropped approximately 6-fold.
⦁   In both cases, a general decline lasted about a year, followed by a quiet period.
⦁   In both cases, "after bubbles" the rates have been fixed at the levels that are considerably higher than the levels "before bubbles". For example, at the end of 2014, BTC was much more expensive than at the end of 2012, while in late 2018 it was much more expensive than in late 2016.
DECLINE IN 5.3
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This simple comparison shows: the scale of the 2018 cryptocurrency crash is exaggerated. The bubble has developed according to the same scenario, as it happened last time, and seriously frightened only the novices.

Judging by the charts, the cryptocurrency market is more alive than dead. Moreover, it quite well follows the standard laws of financial bubbles’ development, and its multi-year trend is clearly positive. For the credibility one can recall, for example, the chart of the oil prices in the 2000s. As we can see here there is also a bubble and decline, but after that – recovery to the values, which are much higher than before the bubble. That’s what happens when the assets are really valuable (not just a short-lived hype), and this is exactly what we have been observing in case of cryptocurrency market.  

 
With a high degree of probability, right now cryptocurrency investments are of particular interest. The upward movement looks quite reasonable, and why it has happened so abruptly, is there some catch behind it, and what are the fundamental reasons that contributed to the upward trend – we will discuss all these questions next time

Analytical department, Trident company, Victor Argonov, Candidate of Physical and Mathematical Sciences.
Source:
http://trident-germes.com/

[morrisgonzalez]

I think the cryptocurrency will remain alive in the future and its use will increase further. The use of the cryptocurrency through online exchange has increased greatly. The cryptocurrency is becoming popular and accessible through online exchange or through offline exchange. When the cryptocurrency dies, many big hits will hit the online market and many financial losses will occur. And the popularity of the cryptocurrency is increasing as I do not think so much popularity and usable currency will die.

[ryap12]

First I'd like to thank OP for posting the information. Very helpful since it is detailed.

It's sad knowing a lot of people lost that time when the market went down after climbing a new peak. And at that time, I did not have any holding in me so I was not affected. Thinking those sudden investors buying BTC at $19k did sure hit them a big lost but we don't know if they sold their holdings or they continue to hold them until now waiting for bitcoin to rise again above their purchase price.

Hoping for Part 2 as I don't have the whole picture regarding what really happened.

[agatha90]

Cryptocurrency will not die, even though prices are falling, as many investors remain optimistic that crypto will become the digital currency in the future, which will replace fiat money.

[Haunebu]

First I'd like to thank OP for posting the information. Very helpful since it is detailed.

It's sad knowing a lot of people lost that time when the market went down after climbing a new peak. And at that time, I did not have any holding in me so I was not affected. Thinking those sudden investors buying BTC at $19k did sure hit them a big lost but we don't know if they sold their holdings or they continue to hold them until now waiting for bitcoin to rise again above their purchase price.

Hoping for Part 2 as I don't have the whole picture regarding what really happened.

Part 2 is already available.

https://bitcointalk.org/index.php?topic=5140551.msg50946733#msg50946733

The big problem here is that op should have condensed the wall of text and organized it in a better manner making it easy to read. That would attract far more readers in my opinion.

[dmty.0809]

I believe crypto will not die, crypto will live and be useful in the future, crypto will make many changes, and be accepted by the government and can be used as a means of payment.

[dajackie]

I doubt that it will die, just look at the fundamentals and how it is working since its inception. Yes, there are problems, yes we need much much more development, but at one point everything will be solved. People thought that no one would want to have a computer at home because it was too slow, big, didn't had many features, the internet followed the same path, the crypto will follow it too, but guess where the last two big invention ended - in your pocket for everyday use, I think that the last invention will end up there too.

[sandra_x]

The peaks and dips we currently see cryptos is not peculiar to crypto-currencies, most emerging asset class usually go through period of wide booms and bursts, high-risks/high rewards, because eventually things become less volatile.It was so with gold, silver and many established assets class

[Broly46]

My own opinion, no money can last forever, every form of money get abandoned when the generational shift from old to new gen. For Bitcoin it is supposedly a new form of money for this generation, and I didn't make it up myself, it's the Satoshi own vision to create Bitcoin as a peer to peer money system, Bitcoin may live until the next generation to come, it could be many decades, by that time you may no longer live on this planet.

[Herbert2020]

bubbles are mostly misunderstood in my experience.  people either go over board and say bitcoin is a bubble no matter what its price is and some others go over board the other way and say there is no bubble whatsoever.
bubbles exist and are part of bitcoin, the 2013 ATH, the 2017 ATH, the previous ones at $20, and $10 were also bubbles. on the way up we will continue seeing the same action be repeated too. it doesn't have to be a bad thing and it is not all there is.
they also exist in all the markets. you just have to try and analyze how much of the price is a bubble. for example for bitcoin at last ATH i would say 50% of it was a bubble and needed to burst, for most altcoins i say 95% of it is a bubble which has not yet busted.

[okala]

Cryptocurrency haven been around for just 10 years of still at it development stage and at that is band to fall any time but it can never die and that is why it said that the bitcoin market is highly volatile if you have been following the market since it inception you will know that after each phase the market must correct it self.

[Genemind]

If op would've categorized and summarized the context, it would be easy for everyone to notice the real point of this thread. Part1 and part2 seem informative yet confusing due to its length. However, it could be another knowledgable context to focus on. We could notice a lot of changes from 2009 but as for me, the current situation of the market wouldn't lead us to bubble.

[traderethereum]

Cryptocurrency will not die, even though prices are falling, as many investors remain optimistic that crypto will become the digital currency in the future, which will replace fiat money.

Yes, cryptocurrency will not die. I agree with you.
The problem is many people are trying to give negative opinion related to the crypto, and that is because they are losing too much money.
But I am sure that the investor now becomes smart and they will only choose the profitable coins, and they will research before they invest in any coins.
Cryptocurrency will lives for a long time because cryptocurrency can give new hope for people to use cryptocurrency to make money and they can have a new source to get a better life.

[Indamuck]

Bitcoin has been called dead many times in the past but like a phoenix it keeps on rising from the ashes.

The beauty of a decentralized system is that it can't be destroyed.  It expands too far and at this point governments have given in and are trying to regulate it.

[Ailmand]

People have doubted about cryptocurrency and they have underestimated it even when it was just starting but the more they drag it down, the more it's developing and firmly standing. Cryptocurrency has been through a lot and has passed all the tests of time so in my personal opinion, no matter how we doubt about it and how many controversies may it face, it will never die but rather grow continuously.

[babarian]

not for today it might even be possible to say that crypto currencies will not die, so far crypto currencies have continued to grow and will not die in the next few years.

[Alpinat]

Of course not. Cryptocurrency can't just die like that. Cryptocurrency most of the investors are not yet known so we can't really say what is their plan in the future. It is so early to say that cryptocurrency will die just like that. Cryptocurrency will be unstoppable after the massive adoption. 

[Mrsparks]

Well I have had a lot of people leave the crypto space as a result of the decline experienced since 2018, I just hope the smart ones come back because I think we might be on the way to a new all time high for bitcoin... Crypto will never die as long as the traditional financial system of the world continue to falter in its bid to provide consumer satisfactory service..

[trickyriky]

I believe crypto will not die, crypto will live and be useful in the future, crypto will make many changes, and be accepted by the government and can be used as a means of payment.

I do not think that something global will happen to cryptocurrency in the nearest two years. Further, it will be more popular. No, it is not going to die, but the market can have deep falls again.

[mandor]

I believe crypto will not die, crypto will live and be useful in the future, crypto will make many changes, and be accepted by the government and can be used as a means of payment.

so far who I know crypto has grown and almost all of the resident in the world has make this digital currency as a permanent or side job. crypto will never die as long as the internet world has not been destroyed. crypto will continue to live with us and of course useful in the future as an online payment tool. don't worry crypto will keep to live and become a part of our lives now.