Byline: Hannah Parker
Digital currencies are a relatively new concept in today’s world, impacting global economic systems. Most, if not all, cryptocurrencies are volatile, with various factors escalating a coin’s volatility. Some factors include scandals publicized in mainstream media and regulatory issues that we have witnessed over the years in the crypto industry. However, despite this, the industry has continued to thrive due to various regulations being put in place, along with upgraded and more efficient technological systems that serve the ecosystems of all digital currencies and the cyber world at large to address issues that arise as the crypto verse expands. Most importantly, despite the hurdles that arise, some of which may seem to lead to the crippling of the industry, certain coins, including Bitcoin and Ethereum, have shown their resilience.
f we look at things more logically, we will realize that there is a pattern in the crypto industry. For instance, a coin or the industry could go through a bull season (where assets and securities are rising). An irregularity shakes people up, leaving the public with negative sentiment regarding crypto, consequently leading to a bear market (a season where the value of digital assets and securities declines for an extended period). However, after some time, other influential factors come into play. Perhaps a new token is introduced, or public figures, institutions, or popular brands invest in crypto and use blockchain technology to bring about an innovation that would bridge crypto and traditional systems. This would inherently decrease negative public sentiment and lead to people having more confidence in crypto and, consequently, a new cycle of a bull market where the market price value of digital currencies inclines again. It is all a cycle with multiple factors influencing each other.
Cryptocurrency has been associated with fraud and criminality for a while, which is not a valid reason to not invest in or research the concept. Yet, the negative association and sentiments are justified due to the number of hacks that have occurred. However, exchange platforms and governments are making means to fortify their security and ensure that their companies’ and investors’ assets are well protected. Over the years, as technology advances and with the introduction of “smart” technology, numerous systems have come into existence to address and alleviate some of these hurdles. As the crypto industry expands, similarly to centralised sectors, there are bound to be obstacles. However, these obstacles do not fully reflect the fact that the innovations and systems launched by the crypto industry are functional, efficient and impacting even daily life as we know it. The FTX crisis is one example of a major event that impacted the crypto-verse. However, from a different perspective, outside of the greed and incompetence of those in management that led to the company’s collapse, its systems and the native token were functional, efficient, and stable.
The Bitcode method official site writes that there are specific patterns every investor and crypto enthusiast needs to know. This includes the fact that various factors contribute towards the volatility of cryptocurrencies which consequently leads to having bearish markets or seasons where the market value and price of a currency declines or a bullish market. In this season, the market value and cost of a currency increase exponentially, which is when most people see their profits rise. Here is the catch: one needs to know when and how to analyse the markets in order to either hold their digital asset and investment during a bear market season or wait until the crypto economy hits a bull market season again. The most crucial factor here is buying and investing in a digital asset or currency while it is either still new and being sold at a low price or buying and investing during a bear season when the market prices are low, holding the investment and only selling or trading when the price value increases again.
Is crypto sustainable? Yes, the industry as a whole is sustainable and scalable, depending on what you invest in. Are there any risks that come with investing in crypto? Also, yes. Similar to risks that come with the centralised stock exchange, some risks come with investing in crypto as it is a financial investment, the main threat being the volatility of markets with the fluctuating price value of digital assets. However, compared to centralised fiat currencies (money) used by different governments, coins such as Bitcoin are not affected by inflation. With every new concept and its application and integration into global economic systems, there are bound to be hurdles. As the industry expands, laws, regulations, and technological systems are invented to address current and future hurdles to ensure the sustainability and functionality of the industry as a whole. Despite what we have heard, especially the public’s negative sentiments, crypto has proven and continues to prove itself valuable. This is further supported by the fact that different industries, including popular global companies and centralised institutions, are partnering with numerous crypto companies and applying blockchain technology to simplify, expand and make their enterprises more efficient.