Why the Crypto Crash is Actually a Good Thing
Cryptocurrencies are dropping again, with all major coins losing their value over the past week, and Bitcoin dropping below $22,000 just yesterday.
In all, it is down more than 20% from its peak in December 2022, and is down almost 40% from its all-time high in October 2022. Many investors are wondering what happened and whether or not they should invest in cryptocurrencies;
The answer lies in this article!
Here are five reasons why the cryptocurrency crash is good news for you - and how to play it to your advantage now!
Let’s talk about history
A lot of people think that we're on the brink of a complete collapse. I disagree.
I think that this is actually a good thing. You see, through pain comes knowledge and growth.
In history, when collapsed (such as during World War II), many incredible innovations were invented.
When Germany experienced hyperinflation (note: first sign of economic weakness in Germany after world war one),
Albert Einstein, Kurt Gödel and John von Neumann came up with remarkable ideas for providing proof about certain scientific assertions without resorting to either mathematical induction or intuitionism:
The theory of relativity, game theory, and the axiomatization of set theory respectively.
Let’s Talk About What Happened In 2018
2018 was the year of Bitcoin. The unregulated currency skyrocketed in value and established a new benchmark for how much money we were willing to believe in something that didn't exist just two years ago.
People who invested when Bitcoin was below $5,000 enjoyed returns up to 500% by early November.
But this meteoric rise also ensured an equally destructive crash
- - as investors jumped ship over fears about government regulation or bankers starting their own crypto
- -currency, Bitcoin’s price plunged back down below $4,000 per unit on December 22nd.
Let's Talk About What Is Coming Next Year
I know this sounds counter-intuitive, but here's my reasoning:
- 1) market fluctuations like this make it more difficult for people to develop market manipulation tactics and
- 2) the steady stream of misinformation about cryptocurrency has started to subside with most mainstream publications now running less extreme stories.
The issue with these articles is that they don't have any reference to what will happen next year, or even further in the future.
I'm going to lay out some possibilities so that we can be prepared when these are realized.
- 1) State and federal authorities will regulate cryptocurrencies by requiring them to disclose details about their businesses.
What would make crypto crash?
There are two ways cryptocurrency could crash: at an exchange or over time.
If coins were hacked and stolen, then that would force an exchange to shut down because they couldn't repay their clients. Hacked exchanges like Mt Gox or Bitfinex have led to crashes in bitcoin before.
Or people's fear of losing their money could make them sell off all of their cryptocurrency in a panic.
It's impossible to know when the next crash will happen, but we can't say that it hasn't happened yet.
Will crypto Rise Again 2022?
The recent crypto market crash has many people worried that it's the end of Bitcoin.
But in reality, this may be a good thing. Let me explain:
As cryptocurrencies become more common, their prices fall because there are more buyers competing for them (everybody and his grandmother wants in on that sweet ROI).
These low prices draw in newcomers who don't know much about the market or investment in general, which causes prices to drop even lower. Thus: crash.
Cryptos will always rebound because they're designed to adjust supply based on demand--which means an increase in demand (which typically happens when people start to lose faith) should create an increase in value.
Will crypto recover?
Sure, this crash can shake people's confidence in cryptocurrencies. But we've seen these kinds of events before.
On November 22, 2017, Bitcoin's value dropped by 30% after $5 billion worth of Bitcoin was stolen from NiceHash, the most popular cryptocurrency mining service at that time.
The recovery took less than six months and Bitcoin was able to rebound to hit a peak of $19.000 on December 17th 2018 before plummeting again in recent days
- down by 70% just last month. I'm not going to tell you what happens next.
But if you think long enough about it, one thing becomes clear: where there is risk, there will always be opportunity.
Is crypto headed for a crash?
Many people are wondering whether or not the crypto market is headed for another crash. In early January, it had one of its biggest dips ever, but then continued to grow and end up having an amazing year.
Although cryptocurrencies have dropped recently, many are quick to point out that this was predicted, meaning things could stabilize. Here's why I believe the crypto crash might actually be a good thing
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