What can we learn from a crazy crypto weekend
Madness of the hyper speculative market of virtual currencies this weekend. In 15 days, BTC went from almost $ 60,000 to a Sunday low of $ 32,000. Even worse for Ethereum, which had exceeded $ 4000 and hit a low of $ 1725 on Sunday and then recovered.
What can we learn from this crazy weekend
- Virtual currencies are still prone to crashes. BTC has been subject to sudden crashes since its inception, and so have other virtual currencies. Just remember 2017 to think you can see BTC vary from $ 20,000 to $ 3,000 in a very short time. The very nature of the market, continuous, with the possibility of automatic trading with algorithms, facilitates this possibility.
- Mainstrem media are still enemies of virtual currencies. Cryptocurrencies are ridiculed when it's good, and when it's bad they are seen as a money laundering tool. In this, characters like Elon Musk do not help. Everyone focuses on outdated elements, perhaps related to Pirate Bay, and not on modern distributed technology projects. Probably behind these facts there is the hand of large companies;
- Bitcoin has a very bad reputation. Paying the ransom for the Colonial Pipeline made it pass for blackmailers' currency. Musk's controversy over non-green Bitcoin has added further weight. Unfortunately, BTC is paying for being the first and therefore the most famous of virtual currencies;
- Coinbase, but also other large centralized exchanges, have not been able to provide the necessary service in the most stormy times. The fact is even more serious because Coinbase is the first exchange that is also a public company that has been able to find abundant resources on the stock exchange;
- However, it is not 2017. I remember those years of the absurd, superficial and bungled white papers. Now the projects that survived that era, or were born after, are more complete, make sense, or have been selected in a Darwinian way. Ethereum or Cardano are very different from the projects of 2017, and activities like Uniswap are complete and well studied.
However, this does not mean that perhaps when you read this article the market has collapsed again, this is not predictable. But let's give some confidence to the evolution of the system
Thanks to our Telegram channel you can stay updated on the publication of new articles of Economic Scenarios.
The article What can we learn from a crazy crypto weekend comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/cosa-possiamo-imparare-da-un-pazzo-weekend-delle-cripto/ on Mon, 24 May 2021 07:00:17 +0000.