Why Crypto Investors Shouldn’t Prepare for a Repeat of 2017

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CONTENT

  • Crypto Assets Bounced Back To 2-Year Highs.

  • The 2020 bull market has a number of fundamental differences from the 2017 bull market.

  • The future prospects of the industry remain uncertain.

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December 2017 will forever be remembered by crypto investors as a special time when money just fell from the sky. In recent months, this feeling has returned again.

The reason for this feeling of déjà vu was the out of control of speculation in the cryptocurrency market. The capitalization of “useless” tokens that have no intrinsic value reaches hundreds of millions of dollars. Money is made out of thin air. Is it fraught with a repeat of 2017 history?

Perhaps the answer to this question will be negative. There are very different factors behind the 2020 fever. Accordingly, the consequences may also be completely different..

Languishing in quarantine

Unlike 2017, this year, people around the world were bored and self-isolated and stuck in quarantine. Someone altogether lost their jobs, someone was chained to their home computer. This situation has created favorable conditions for the growth of interest in the cryptoindustry. Many people got carried away by tracking price charts online, dreaming of making fabulous profits without leaving the apartment.

How has the pandemic affected the crypto industry? Join the discussion in our Telegram channel – and you will find out everything!

Inflation threat

In 2017, the dollar was doing fine. At that time, Britain had recently announced its decision to leave the EU, which hit both the pound and the euro. Now the US authorities tirelessly exploit printing presses, devaluing the national currency.

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In addition, the US Federal Reserve recently announced a policy update. The regulator will now allow inflation to exceed the target. This has further increased investor fears of an imminent rise in inflation. Under these conditions, Bitcoin can become an attractive asset for investors to hedge against inflationary risks..

Institutional investors

Indeed, in recent years, cryptocurrency financial instruments are increasingly penetrating traditional markets. A lot of attention this year has attracted the success of the investment company Grayscale Investments.

In addition, more and more institutional investors are buying bitcoin. As recently as August, the largest public analytical company MicroStrategy Incorporated announced the purchase of bitcoins for $ 250 million. The company said that it considers cryptocurrency to be a long-term store of value. Such a course of large companies towards new strategies for the redistribution of capital is a good sign for MTC..

Friendly banks

Traditional banks have long been skeptical about Bitcoin, but now they have begun to soften their stance. A graphic illustration of this evolution is, for example, JP Morgan bank and its head Jamie Dimon. Although Daimon managed to establish itself as an ardent opponent of bitcoin, the bank nevertheless developed its own blockchain network Quorum, and is also creating its own coin.

Many other banks are doing the same. Their ability to support customer access to exchanges should potentially support the massive adoption of cryptocurrencies.

An even friendlier DeFi

Why Crypto Investors Shouldn't Prepare for a Repeat of 2017

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The hype in the DeFi segment is now fulfilling the dreams of crypto enthusiasts in 2017 about the superiority of cryptocurrencies over fiat. Many fear a huge bubble is brewing in the decentralized finance segment. However, a number of experts regard this industry as a revolutionary new way of saving value, storing money, earning interest or obtaining loans without going to a bank..

If the DeFi industryDecentralized finance (DeFi) is a financial services built on blockchain technology that offer users access to an open, efficient and … More can really confirm the status of such a qualitatively new financial structure, this would mean that the DeFi- token are now at reasonable – or even low – levels.

Decentralized exchanges

Decentralized Exchanges (DEX) continue to gain popularity, competing with the heavyweights in the crypto marketplace segment. Ethereum-based decentralized protocol Uniswap recently surpassed the centralized exchange Coinbase Pro in trading volume for the first time..

More professionals

Compared to 2017, numerous participants in the crypto industry, including developers, traders and reporters, have significantly deepened their knowledge of blockchain technology. It also contributes to more active mass adoption of cryptocurrencies, as well as technological improvement of the entire ecosystem..

Thus, a number of fundamental factors promise the further success of the blockchain industry..

However, we must not forget that some of them are short-term. It is difficult to predict with certainty what will happen if the DeFi bubble bursts or the US dollar stabilizes at this time..

In addition, the overall success of the blockchain is not a guarantee of Bitcoin’s prosperity. It may be unexpectedly supplanted by some new revolutionary development or alternative currency (remember, for example, the recent breakthrough of the Polkadot token).

Disclaimer

All information contained on our website is published in good faith and objectivity, and for informational purposes only. The reader is solely responsible for any actions he takes based on the information received on our website..

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Why Crypto Investors Shouldn't Prepare for a Repeat of 2017
Why Crypto Investors Shouldn't Prepare for a Repeat of 2017
Why Crypto Investors Shouldn't Prepare for 2017 Repeat

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