Hackernoon logoThere’s Blood On The Streets — What Now For Cryptocurrencies? by@ermos.k

There’s Blood On The Streets — What Now For Cryptocurrencies?

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@ermos.kErmos Kyriakides

I’ll go ahead and spoil it for you — the future of cryptocurrencies is bright. However, I’d like to write about what we have been witnessing over the past few weeks.

People are panicking and this is evident from the messages I have been receiving privately and over social media — especially from people newer to the space. However, we aren’t anywhere close to the capitulation of the 2011 and especially the 2013 crashes. I remember back then, the atmosphere was different to the atmosphere today— it was pure despair. We still have a long way to go until we reach that point. It remains to be seen whether the prices fall further and we do reach that point. I will not delve into that in this post.

A couple of reddit posts during the 2013 crash

What we are witnessing over the past few weeks and days, is a correction from the absolutely crazy bull run we had during the past year. People (and institutions) are taking profits and this has caused a fall in the price of Bitcoin, Ethereum and all other cryptocurrencies. Some FUD (fear, uncertainty, doubt) has also surfaced over the past few weeks, creeping in peoples’ minds, which has aided this drop.

It’s All About Human Psychology

It all comes down to one thing; human psychology. It’s human nature — you see your investments drop and you want to sell and get out as soon as possible. You see other investments rise and you impulse buy or FOMO (“fear of missing out”) as they call it.

To add to this, a lot of fresh money has entered the market over the past few months. Most of the newer investors see cryptocurrencies as get rich quick scheme and don’t see the underlying value that these projects bring nor carry out proper research before investing. They have only been part of the market during the crazy upswings — never during the downswings. Evidently, when things “turn red” they scramble out the door at a loss.

Looking ahead…

Technology wise, nothing has changed over the past few months. The same technology that was going to change the world 5 months ago, is still present today. On the contrary, it’s more mature and is prepping to hit mainstream.

Looking ahead into 2018 & 2019, the ecosystem will mature even more. A scaling solution will be implemented for Bitcoin, to help with the transaction costs & speed. Decentralized applications (dApps) will start hitting the main net and be used in the real world. An even greater amount of institutional money will enter the space. Exchanges will be more reliable and resilient. A lot of overvalued and “useless” projects will disappear— something that will only help the ecosystem mature. We will be inching a step closer where cryptocurrencies will be part of our daily lives, in one way or another.

Like all Bitcoin bull runs (or bubbles if you like) of the past, a significant number of new investors have entered the space. They have created accounts on various exchanges, submitted their paperwork to get verified and deposited money to buy cryptocurrencies — something we all have done when we first entered the space. A huge majority of them have only “flirted” with cryptocurrencies depositing “insignificant” amounts.

And what is going to happen once the media narrative changes and starts writing about how cryptocurrencies are maturing and have real world applications? Investors that went through the sign-up process in the previous bull run, will return. None of them would have forgotten the reason they initially invested; the premise of 100X returns. And those who just “flirted” with them originally, will be ready to impulse buy a more significant amount than last time.

These reasons will be the fuel for an even crazier bull run in the future.

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