Cryptocurrency has existed since 2009 with the launch of Bitcoin. The thought of an electronic digital currency that has been secure, decentralized, and anonymous seemed revolutionary. The idea quickly grew in popularity, resulting in the birth of many other cryptocurrencies such as for example Ethereum, Litecoin, and Ripple. But fast forward to 2021, and you may be wondering if Is crypto dead? or simply going right on through growing pains? Let's take a peek at what's been happening on the planet of cryptocurrency in the last few years.
The Rise and Fall of Cryptocurrency Prices
One of many biggest indicators that individuals used to gauge the health of cryptocurrency is its price. After all, when prices go up, it generally means there's demand for the asset and investors are confident in its future prospects. Unfortunately, this has not been the case for a lot of cryptocurrencies in the last few years. Since hitting an all-time full of 2017, most crypto prices have either remained steady or dropped significantly. This has led some to think that crypto is “dead” or no longer relevant.
However, it is important to note this doesn't signify crypto is dead—it just means that it's going right on through growing pains as it matures into the best asset class. In reality, there are still plenty of explanations why one should be optimistic about cryptocurrency's future prospects; for instance, institutional investors are now entering the room at an unprecedented rate due to its potential as a store-of-value asset and hedge against inflation. Additionally, blockchain technology continues to evolve at a rapid rate which may result in more widespread adoption among businesses and everyday users alike. Last however, not least, more governments across the globe have begun recognizing cryptocurrency as legal tender which may help legitimize it further down the road.
Increasing Regulation & Adoption
Recently we have seen an increasing quantity of governments around the world recognizing cryptocurrency as a legitimate kind of payment or legal tender (e.g., Venezuela). It has had two major effects on crypto: 1) It's helped legitimize it even further; 2) It in addition has led to increased regulation surrounding how crypto can be used and committed to by people (e.g., taxation laws). While these regulations may appear daunting at first glance, they really provide more security for investors by holding them accountable because of their actions (if they don't pay their taxes promptly then they may face fines/penalties). Additionally, increased regulation leads to increased adoption as a result of greater trust from both businesses/investors in addition to everyday users who are looking for approaches to securely transact with one another without having to worry about fraud or identity theft.
Conclusion:
Overall, while there may be negative sentiment surrounding cryptocurrency today because of its volatile price movements over the past few years—it does not imply that crypto is “dead” or irrelevant; rather it just means it is going right through growing pains like some other asset class would before becoming mainstream accepted by society at large. With increasing regulation and adoption from both institutional investors and everyday users alike—we can expect good things from crypto in 2021 and beyond!