Bitcoin is having a few days of respite after breaking the psychological barrier of $20,000 and continuing to plummet. So far this year, the main cryptocurrency has been devalued by 53.45% of its value, and many other digital currencies, such as Terra Luna, crashed resoundingly. However, it can still be verified that yes, there are still people who believe in the future of cryptocurrencies: does it make sense? Or is it just a backlash from the crypto community?
At the end of last year it seemed clear that cryptocurrencies were the digital ship one should get on. before it sailed. From his hand, the NFT phenomenon began to gain high levels of popularity, but all this has been left behind in a brilliant way in recent months, compromising entities that have invested large sums of physical money in the crypto world, such as the Government of El Salvador, which sees how more than half of its investment has evaporated.
The very high uncertainty of this market it involved high risk (and also higher profits), which was attractive enough for many users. However, with the energy crisis hitting harder and harder and inflation running rampant in most countries, this investment fervor has come to a screeching halt. The website alternative.me analyzes the general sentiment towards cryptocurrencies on a daily basis, and has been anchored in extreme fear for more than a month.
Do cryptocurrencies have a future?
Despite the apocalyptic scenario in which cryptocurrencies are moving, many agents in this sector consider that This widespread fear of investors is good news. The theory implies that the most novice and least resistant have abandoned their adventure and from now on only investors who trust cryptocurrencies as a long-term investment and not merely speculative to get a high return in a short time will remain standing.
Reputed figures such as Robert Reich, Secretary of Labor in the administrations of Bill Clinton and Barack Obama in the US, have not hesitated to compare cryptocurrencies to ponzi schemes. This scam model requires many participants to enter the same market so that there is enough liquidity for those who want to leave. A massive exit, therefore, would imply the collapse of the system completely.
However, there are some signs that suggest that cryptocurrencies are not as fleeting a phenomenon as it seems (Yes, the headless projects that have been seen in recent times, like the vast majority of NFT collections). The vast majority of central banks in the world are already dedicating great efforts to catch up on cryptocurrencies. El Salvador and the Central African Republic have been the first and most daring, having established bitcoin as their official currency in order to gain more financial freedom, something that remains to be seen.
Other challenge that cryptocurrencies have to face is that of privacy and security. The last year has been littered with news reporting the collapse of huge black markets in the dark web that took advantage of this lack of regulation of bitcoins and other cryptocurrencies, so it is a field in which to clearly advance.
In the same way, the energy impact of the cryptocurrency mining process it is also important and it is expected to decrease significantly in the coming years. If crypto mining succeeds in minimizing its environmental impact, the future of bitcoin is likely to be somewhat more promising than it seems today.
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