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Is crypto market past ‘point of no return?’

Bitcoin and the broader crypto market have been gleefully declared lifeless quite a lot of instances throughout bear markets, however some specialists say it will take a genuinely excessive set of occasions for it to really die.

In response to 99Bitcoins — a web site that, amongst different issues, tracks what number of instances Bitcoin (BTC) has been declared lifeless by mainstream media shops — the biggest crypto by market cap has died 474 times since 2010.

Usually, the proclamation is met with cheering by crypto skeptics as proof that BTC is not a viable asset, nevertheless it won’t be so easy to kill off crypto — at the least based on some specialists within the area.

Tomasz Wojewoda, head of enterprise growth at BNB Chain, is assured it will take greater than a bear market or crypto winter to end BTC and the crypto market, regardless that it’s been a very harsh downswing because the all-time highs of 2021.

A bear market is when the value of crypto has fallen by at the least 20% and continues to fall, whereas a crypto winter is a chronic interval of depressed asset costs out there.

Wojewoda instructed Cointelegraph that, in his opinion, the one means BTC and the broader crypto market may die can be if one thing excessive occurred, such because the underlying group dropping curiosity and everybody exiting the area directly.

Nonetheless, he doesn’t see this occurring anytime quickly. No matter fiascos like the FTX saga and different dramas within the area, Wojewoda believes there’s all the time “going to be demand for crypto.”

“The crypto market, like several market within the economic system, strikes in waves and developments upward or downward relying on market sentiment,” he stated. “The market has been by means of a number of bear markets, however traditionally, now we have seen the market get well from comparable developments.”

In 2011, 2013, 2017 and 2021, crypto noticed large spikes in worth, solely to come back crashing again all the way down to earth. To date, after every crash, the value has recovered years down the street. 

General, this bear market and crypto winter has been particularly savage. After reaching highs of over $69,000 in 2021, BTC lost greater than 60% of its worth in 2022, based on CoinGecko. As of 2023, it has recovered some, however BTC continues to be roughly 40% down since its all-time highs.

In response to Wojewoda, difficult instances like these “can truly be optimistic for the trade” and never an indication that crypto is dying, regardless that it might really feel prefer it. Particularly, he thinks market crashes may also help weed out unhealthy actors.

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He additionally sees it as a time when “robust initiatives give attention to constructing and bettering the person expertise.”

Regulation received’t kill crypto 

Banking regulators seem like making an attempt to kill or dismantle the crypto trade, brandishing an array of lawsuits and an intimidating flood of regulatory measures. There are fears this might spell doom for the trade.

The US Securities and Change Fee, led by Chair Gary Gensler, has been particularly aggressive against crypto firms. In response to Gensler, his agency has filed over 780 enforcement actions in 2023, together with over 500 standalone instances.

Crypto and BTC have survived, although. Laws have been gradual to come back and, in some cases, poorly created. Wojewoda thinks some type of regulation can finally be a superb factor for the trade and won’t be the explanation it dies.

“World laws can affect the expansion of crypto; nonetheless, with extra nations embracing crypto worldwide, I don’t assume this will probably be a motive for crypto to ‘die off,” he stated.

“Regulation within the trade is an efficient factor. It retains customers protected, and a transparent framework allows the trade to construct round it.”

Some crypto will in all probability die, however the trade will survive

Wojewoda is satisfied the crypto market will attain the opposite aspect of this crypto winter and past. He thinks it’ll possible survive as an idea, however not all initiatives and currencies will make it long-term.

In response to Exploding Subjects, there are over 10,500 completely different cryptocurrencies in existence as of November 2023. Nonetheless, it’s estimated that solely 8,848 are nonetheless energetic within the area, with the others dropping off or dying.

“Initiatives that didn’t have a real-life use case died off, however the ones that actually make an affect haven’t solely survived however thrived,” Wojewoda stated.

“There are lots of issues that may affect the trajectory of crypto, akin to sentiment, regulation and different components — for instance, the Bitcoin ETF submitting and upcoming Bitcoin halving,” he added.

In the long term, together with weaker fingers dropping off, Wojewoda believes it’s not “out of the realm of chance” that some crypto will probably be changed by new, higher tech.

He doesn’t assume BTC will probably be among the many casualties as a result of its community impact and person base give it a big benefit over different cryptocurrencies.

“Bitcoin will possible stay as the most well-liked crypto when it comes to market share. The place I feel we are going to possible see extra motion within the ranks is amongst cryptocurrencies that supply real-world functions,” Wojewoda stated.

“These initiatives have functions past digital currencies, and the tech is repeatedly evolving, discovering new use instances and functions for the true world.”

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These functions are one of many causes Wojewoda thinks the market will endure long run. Whereas not all will make it, the broader crypto market and BTC will survive.

The market will bounce again, with BTC nonetheless standing

Markus Thielen, head of analysis and technique for digital asset funding agency Matrixport, can also be skeptical {that a} bear market or crypto winter poses a real risk to the crypto market and BTC.

Chatting with Cointelegraph, Thielen stated that whereas many individuals exit the area throughout bear markets, it’s a traditional a part of the method, not an indication of crypto’s impending loss of life.

“Many individuals have excited the crypto trade over the past 12 months, as these companies have expanded close to the highest of the final bull market,” he stated.

“With out ample revenues and extra capital injections from enterprise capital funds, these crypto companies need to right-size their corporations.”

Proper-sizing an organization is the method of restructuring to make earnings extra effectively and meet up to date enterprise aims. Proper-sizing normally includes lowering workforces, shifting round higher administration and different cost-cutting measures.

“So long as there’s worth being despatched round electronically, crypto has a price proposition that’s tough to match with the standard banking rails,” Thielen added.

To date, there have been 4 bull markets — 2011, 2013, 2017 and 2021 — and file numbers of individuals have entered the space every time, solely to vanish when the bears strike. A bull market is characterised by rising costs and investor optimism.

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In response to Thielen, every bull market is being constructed upon a brand new narrative, which can proceed to be the case. He says there’ll possible be another narrative for a fifth bull market very quickly.

“With regulators approving Bitcoin futures in 2017 and probably a Bitcoin ETF in 2024, the regulatory stage taking part in discipline is cemented,” Thielen stated.

“I can’t think about Bitcoin ever disappearing, as the thought of Bitcoin performs into the fingers of human fallacy.”