Has the Crypto Bubble Burst?

Massive losses on the cryptocurrency markets in recent months, the collapse of Terra LUNA, and leading crypto players freezing transactions have all been cited as evidence of the crypto bubble burst many feared.

It has left many asking, ‘has the crypto bubble burst’.

To get straight to the point, here’s my answer – no!

Crypto Bubble Burst

While the past few months have been shocking and painful for many investors, I don’t believe it spells the end of cryptocurrency. Some argue this is a market correction to bring over-inflated prices back to reality and weed out coins and crypto companies too weak to survive.

Some hope that a stronger, better market with reduced volatility and more reliable products will emerge. That remains to be seen.

It hasn’t been great for investors or the reputation of crypto, but it doesn’t mean the bubble has burst.

Why Not?

Because, in my view, the crypto bubble is the concept of cryptocurrency, not the individual coins, tokens, and companies.

While values have plummeted and organisations have disappeared, the idea of cryptocurrency has not burst.

People still believe in the function of crypto and the major role it will play in the future of global finance. The last few weeks have been a painful reality check, but don’t mean the crypto bubble has burst.

Why Would the Crypto Bubble Burst?

There are threats to the concept of cryptocurrency. Criminal intent, criminal use, and lack of regulation are just a few.

Another is investors who have speculated without critical analysis in search of mega-profits. They have thrown in with pump and dump schemes that damage crypto’s reputation and threaten the adoption of DeFi.

Further, business journalists need to be more questioning in the crypto space. Traditionalists ignore it as a fad; zealots will have nothing negative said about cryptocurrency (at least the ones they like). We need journalists to be vigilant for the trends and issues the markets experience to bring respectability to crypto.

Greater critical analysis of the coins and products popping up all over the place in the cryptocurrency space might help reduce volatility and reassure new investors that this is a safe place to trade.

A Stumble is Not a Crypto Bubble Burst

The collapse of a cryptocurrency and massive price falls across the markets are cause for concern. This is, however, not the endgame for crypto.

Put it like this; we have seen the value of fiat currencies crumble and some nation’s currencies driven to the point of extinction by economic turmoil over the years. Did that spell the end of cash as a concept? No.

Why Crypto?

One reason the cryptocurrency bubble hasn’t burst is that so many see DeFi as a much-needed alternative to centrally governed finance.

The traditional financial system means that when there is economic woe, the burden can be passed on to society through inflation, increased interest rates, and rising living costs.

A government, alongside its central bank, decides its economic policy without your input, then makes you pay for it.

And while the largest financial institutions tell how and when you can access your own money, they are not constrained by the same rules as you and I. Remember 2008? If they gamble and lose, they can be bailed out and that cost is also passed on to you and me!

Other Options

This is why the crypto bubble burst hasn’t happened. The limitations of centralised finance are so well recognised that decentralised finance retains its support even when the crypto markets are volatile.

Let us take, as an example, Bitcoin.

The Bitcoin network is a decentralised system that stores its native currency, BTC, on a distributed ledger. A global network of computers keeps a copy of the ledger recording every Bitcoin transaction that has ever occurred. This ledger is impervious to change, permanent, and uncontrollable by any one party.

Bitcoin is available to anyone with an internet connection and is not governed by a single entity. It is also immune to inflation. Its supply is hard-capped at 21 million, which means that the supply cannot be changed no matter how high the demand. It cannot be devalued by government policy, unlike fiat currencies.

Because critics cannot see a tangible value to BTC, they claim it is a Ponzi scheme. However, those who have seen salary value fall in real terms recognise the benefits of an inflation-proof asset.

Bitcoin’s detractors are typically people who are unaware of, or don’t care about, the reality of rising prices and eroding civil liberties.

Despite the significant flaws in the current financial system, I am not advocating for cryptocurrency to replace it. I’m not even going to argue that cryptos like Bitcoin are a good investment for everyone.

Instead, I’m arguing for the freedom to choose how we invest our money. We have a historic opportunity to own a piece of a brand-new asset class with Bitcoin and the rest of crypto, and we should be the ones to decide how to play.

And I am not alone.

That is why, despite recent market volatility, the crypto bubble hasn’t burst.

Read more cryptocurrency and blockchain news.

Brendan Beeken is an Entrepreneur, Commercial Strategist, Investor, Philanthropist and the Founder and Chairman of cryptocurrency exchange?Moni Talks. By sharing his business journey, both the successes and failures, and his personal values and vision, he hopes to inspire and assist fellow businesspeople and budding entrepreneurs.?Find out more at?brendanbeeken.com