Most of the cryptocurrencies including the digital gold, Bitcoin (BTC), have been seeing a downtrend since Nov. 2021, when the markets were at their best and crypto hit an all-time high of $3 trillion. Consequently, some believe that BTC is dead for the 458th time.
Bitcoin critics have come forward many times when the markets get hit with regulations, tightening policies, or rate hikes. According to 99Bitcoins’ data, the largest cryptocurrency has been called “dead” a minimum of 458 times since 2010. Of this tally, 19 cases were recorded this year.
However, the Co-Founder of ReSource, Ashley Taylor Buck, believes that Bitcoin is still alive “more than ever.”
“It is the strongest use case for a third, neutral, non-partisan monetary system. It is the only large-scale, truly decentralized network that will handle the volume of cash necessary for sovereign and nation-states to trust and transact with each other. There is also no chance it can disappear because the blockchain is running on satellites in space,” Buck told Be[in]Crypto.
According to Buck, two of the most important reasons, on a macro level, responsible for the latest crypto crash are the US Federal Reserve’s (Fed) rate hike “to alarming levels” and mass overleveraging with margin calls and liquidations.
Celsius Network’s flush of liquidations has also had a major impact on the decentralized finance (DeFi) ecosystem. Buck believes that Celsius’s recent actions will potentially cause long-term damage.
“There’s also a lack of solid investments available in the crypto space, more so speculative investments based on future potential. Whenever there is a shock to the system like this, it exposes the lack of real-world blockchain foundations,” she said.
Terra and Luna
Terra (LUNA) and its sister stablecoin TerraUSD (UST) could have also triggered this year’s crypto crash when both of the coins started losing value in early May. The stablecoin lost its peg to the US dollar and while LUNA was used to fix the mess, it lost its value by almost 100%.
The Luna Foundation Guard (LFG) had to sell its Bitcoin reserves, worth roughly $3.5 billion, to save UST and LUNA. However, Terra co-founder Do Kwon had to create another plan, which eventually failed again.
While watching short-term projects come to an end, Buck believes that the real investment that has come into the space is now scarred, and with macro systemic issues outside of crypto, the market recovery is very dependent on the development of economic solutions.
“The systemic issues are here to stay – we must develop new models with long-term viability as a priority to get through this phase,” she added.
Is there any hope?
The crypto space has lost around two-thirds of its all-time high total market capitalization since Nov. 2021. However, with the current bullish moves and funding, Magic Eden’s $130 million deal, for example, the market has also shown signs of hope. According to CoinMarketCap data, the industry’s market cap is consolidating around the $940 billion mark.
Buck says that the real projects will continue to build, and the fundamentals are still intact. She says that the retail perception and trust of the space have changed due to the circumstances, and they will take time to recover because it’s “hard to bring trust back.” She expects to see the emergence of more impact-focused projects, particularly in the Reimagined Finance (ReFi) space. Buck added:
“We will likely see more liquidations, and a clearing out of the market of poor projects. However, some good projects will die too. In the long term, Web3 will become the next layer of the internet within 5-10 years, and there are some good opportunities now for investors to get low valuations, and this will continue for the rest of the year.”
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