Cryptocurrency adoption is rising, prices are falling – why?

Advanced Blockchain AG announce investment in WOM Token

The current market situation with cryptocurrencies, especially with Bitcoin’s price is kind of extraordinary in terms of economic sense. The adoption of cryptocurrencies is rising, along with the adoption of blockchain technologies around the globe. The blockchain market is expected to reach around $2.3 billion by 2021.

Yet, the prices of major altcoins are falling. Bitcoin and Ethereum, the two cryptocurrencies with the largest market capitalizations, have lost more than 90% of their value cumulatively. Bitcoin was trading at around $20,000 per coin in December 2017, and Ethereum has reached price levels of around $1,300 per coin. both are built on blockchain, and their acceptance among financial institutions and even governments is growing. For example, the US State of Ohio became the first state to accept tax payments in Bitcoin. 

Adoption is rising, prices of digital coins are falling. According to some press, the major reason for the fall in prices is the risk aversion among digital coin investors. The market is still immature and growing concern over regulation is rising.

Warren Buffet has expressed his negative opinion on Bitcoin and has pointed out that the “people’s currency” does not have intrinsic value, i.e. its value is not driven by a tangible “asset” such as earnings, future management plans or anything of value. The only sentiment that drives the price of Bitcoin is the community’s agreement on what is its worth. However, the underlying technology behind it, blockchain, has been adopted in multiple sectors, i.e. from real estate to car automation to artificial intelligence. So, there must be a correlation between blockchain and the value of Bitcoin and Ethereum.

The underlying value of the “people’s currency” may be the mass adoption and potential of blockchain. Another theory behind the future potential of Bitcoin and other altcoins is that these financial products become more and more complex, with all the hash wars, the variations and disagreements among communities. And while these may affect the prices of major altcoins in a negative way, the long-term value may be rising, as the disagreements signal different visions over the future of a particular coin to suit different needs of the investors and the communities.

And while investors who put some of their funds into the crypto market should be ready to lose all of their money, may be rewarded in the long-term once regulation and volatility stabilize in the cryptocurrency market.

Related News


Cryptocurrency adoption is rising, prices are falling - why?


Send this to a friend