Financial analysts have long been saying that the cryptocurrency space is in a bubble-like state. Though I fiercely refused to accept their point of view last year, today I am more on their side. In fact, I really hope the bubble bursts.
No, I am not against cryptocurrencies. However, this year we can clearly see that there is something very wrong in the world of crypto finance. Apart from the long list of illicit activities that happen on a daily basis, it is obvious that the interest in digital assets has changed. The investors have changed and the attitude has changed as well. In my opinion, the sooner the bubble bursts the better for the whole cryptocurrency space.
“I want it all and I want it now”
This attitude killed the noble ideas of Satoshi Nakamoto. Cryptocurrencies emerged because they had to. Nakamoto intended to set us free from the corrupt financial system but instead, the crypto community thwarted that by speculating. Yes, I do believe that price speculation destroyed the crypto world. Instead of being independent we turned into robots which buy and sell thousands of worthless coins in an effort to bring something home. If you are still missing the point, the business side of crypto trade is bad for the market in general.
Why the bubble has to burst?
You know the answer to this question – there are way too many tokens, most of which are totally useless. In fact, there are at least 800 dead coins, according to DeadCoins.com. What does this mean? I mean, everyone is trying to cash in on the crypto trend – developers, average Joes that know nothing of stock trading, digital assets or finance in general, fraudsters, ICO issuers, and most recently – institutional investors.
Let’s face it, the technologies underpinning cryptocurrencies are far from perfect. When something in its infancy draws so much attention and sucks up so much money somehow everyone forgets that it needs tons of improvement. What I am trying to say is, investors and traders are unconsciously forcing the events. The hype is poisoning the crypto environment because it paints a false picture that cryptocurrencies are ready to conquer the world, which they obviously aren’t.
On the other hand, when the bubble bursts we will have a more realistic point of view. Furthermore, all these shitcoins will disappear once and for all, which in turn will strengthen and consolidate the market. Indeed it would be much wiser to use a couple of well-developed tokens that have real-life use cases, that have no scalability issues and which operate under well-thought regulatory frameworks.
It is for the sake of cryptocurrencies to understand that we need to get rid of all these tokens that have no other use apart from speculation. Cryptocurrencies have to make our lives easier, not harder. However, at the moment it’s the opposite. We fail to justify the existence of each and every token, we fail to achieve worldwide adoption, and we even fail to have a clear stance on them. In contrast, a bubble burst will serve just like hitting the restart button. We will have the opportunity to start anew. After all, once the dot-com bubble exploded it didn’t destroy the internet but rather made internet projects more focused.