Is This Crypto Winter the Same as 2018?

Recent events and the downturn in the cryptocurrency market have caused great losses for investors so many people are completely disappointed with this market and even forbid others from entering this market. In the meantime, some experts and thinkers are looking for similarities and differences between this downtrend market and past downtrend markets to predict the future of the crypto market.

The cryptocurrency market is tied to tape and creativity, which is why its downfall is more noticeable. In the current situation, everyone has an analysis of what happened and the factors that caused the prices to fall.

Some blame the Stables for the loss, and some blame political issues for the crash. After this, more people will seek regulation in the field of the crypto industry, and on the other hand, the demand for the reconstruction of this market will increase.


What will happen?

After this commotion, the calm caused by fatigue will dominate and we will forget these issues, and then everything will be repeated from the beginning. People are like cells, and society is like a giant creature. Each person has a specific limit to resist the collection we are part of. Besides, there is no good reason to resist. No anti-technological view has ever been right in the face of the constant technological changes that are reshaping the nature of human society. Of course, they may have been satisfied with this confrontation at the same time.


The bright side

Those who are interested in this industry are looking for a window of hope through which they can see a bright future of market reconstruction. Many are looking for innovative ideas and economic change to improve cryptocurrency markets.

This is where we can see the big difference between the present and the market collapse period in 2018, coinciding with the peak of the initial coin offering (ICOs). At the time, large sums of money were being raised for start-up platforms and venture capital investments. Billions of dollars were raised for the promise of things that were only on paper and never made or used by anyone. It was a collapse in the ideological space created by the pressure of regulators on the token-based method of raising capital.

Raising capital is not the main issue. The most important issue is the commitment to investors before starting the ecosystem building process. In addition, not much was said about the economics of Web 3.0 at the time. There were ideas about how to organize decentralized organizations (DAOs) or applications of NFTs, but at that time no one had managed to make as much money as today’s artists.


Innovations will be sustainable

The cryptocurrency downturn of 2022 bears little resemblance to the failure to deliver on the promise of innovative technology and is more like the leveraging of traditional financial systems on a particular asset class. Words like “banking crisis” or “bankruptcy” that people use are exactly the words you can use for burning but efficient sectors of the economy.


In addition, cryptocurrencies are much more intertwined and integrated with macroeconomics than previously thought. Thus, the effects of the Federal Reserve raising bank interest rates will create a risky environment in which technology companies deliberately file for bankruptcy, and the valuation of cryptocurrencies will be done in a way that was not seen in 2018. This means that we have entered the world of large organizations very quickly.


We don’t say that the Web 3.0 is flawless or that it works perfectly. Instead, we refer to a vital systematic economy that has goals for the structure of the global economy. There are also malicious players involved in so-called “Rug Pull” and fraud, and there will be hackers and thieves attacking digital banks. The fall in prices reveals what they have done, and in the long run, their names will not be important except to give an example and show how the price chart works in such cases.


Machines and robots built on Web 3.0 will continue to function even if the value of the total locked capital (TVL) of their platforms is lost. This was not the case with Lehmann, Enron, and other centralized companies whose bankruptcy and liquidation processes took many years.


Companies, individuals, and DAOs that survive market changes will change their mindsets. Assets should not be fully invested in a particular token. Risk management becomes more important when market happiness pervades. Multiplying a token is not fundamentally correct. Trading levers increase the speed of price fluctuations. These things are easy to say but difficult to do. The good thing is that we have no choice but to deal with the situation; Because this situation is something we are currently experiencing.


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