When reading the latest blockchain and cryptocurrency obituaries, it's helpful to remember that they've been written before.
The panorama: There have been many booms and busts of cryptocurrencies. But in each bust, the bottom is a little higher than the previous time. This is the slow build believers are counting on to eventually bring crypto into the mainstream.
- There are people around the world committed to the resilience of cryptocurrencies, with hundreds of billions of dollars in value still deployed on many blockchains.
Driving the news: The FTX collapse it's just the latest headline-grabbing flop to rock the cryptocurrency market this year. The collapse of the Terra stablecoin in May actually started the current recession.
Retrospective scene: There were bitcoin booms in 2011, 2013, 2017, and 2021. The last three have received widespread mainstream attention, with obituaries similar to today's being written after each previous cycle.
- They were all premature.
- One school of thought suggests that any time a market crash hits the front pages of mainstream media (as FTX and crypto have), the trend is over.
Of note: Today, more machine power is mining bitcoin and secure network what any other boom time in the history of cryptocurrencies.
- In fact, the power of the machines has grown throughout 2022, devoting more resources to bitcoin despite the market crash. That persisted even in the midst of China expelling miners, environmental controversiesand supply chain problems everywhere.
- If the industry was dying, these miners should be disappearing. they are not
By the numbers: Global demand for bitcoin right now is roughly equal to a level that, just a few years ago, was only reached in an atmosphere of irrational exuberance.
- Lately, the bitcoin price has been hovering around $17,000. But even after losing 2/3 of its value earlier this year, it was still above its 2017 high.
bitcoin price it's not just a number: it's a measure of how much the world wants a thing. After every boom and bust, there are more people who want crypto than there were in the last bust. This keeps happening, and seems to be happening again.
What we are seeing: The Bitcoin price could still go much lower, but unless prices stay below 2018 levels, the digital currency is likely to come back with a vengeance, just as it has before.
