Is Crypto Really Dead? A Comprehensive Analysis

Is crypto really dead, or is it just facing a temporary setback amidst the ongoing volatility and market fluctuations?

“Crypto is dead.” This statement doesn’t come from us; it was made by Chamath Palihapitiya, one of the biggest venture capitalists and early adopters of cryptocurrency. Interestingly, in the year 2021, Chamath was the same person who confidently predicted that Bitcoin would surge to $200,000. He believed that as more investors recognized the need for an “uncorrelated hedge” against untrustworthy national leaders, Bitcoin would replace gold as digital gold.

But now, two years later, he has made the bold assertion that crypto is dead. This statement begs the question:

Is Crypto really dead?

To gain a deeper understanding, let’s analyze the possible reasons behind Chamath Palihapitiya’s change in perspective.

Here’s an interesting finding from JPMorgan’s latest survey! According to their seventh edition of the e-Trading Edit, a whopping 72% of institutional e-traders have indicated that they have no plans to trade crypto or digital coins in 2023. The survey was conducted with 835 traders from 60 different locations around the world, aiming to understand the impact of technical developments and macroeconomic factors on trading performance in the upcoming year.

It’s quite intriguing to see such a high percentage of institutional e-traders showing a lack of interest in trading cryptocurrencies and digital coins. This finding suggests that a significant portion of institutional traders are either skeptical about the crypto market or have chosen to focus their efforts on other asset classes.

In a recent rollercoaster ride, the price of Bitcoin experienced some significant swings. On April 14, 2023, Bitcoin soared to a high of $30,000, marking a thrilling moment for crypto enthusiasts. However, fast forward to June 6, and we witnessed a sharp decline in its value, with the price tumbling down to $25,000. This sudden drop led to a significant loss in market capitalization, causing billions of dollars to vanish from the crypto market.

Is crypto really dead? What do the Experts say?

No, crypto is not dead. Amidst all the negativity surrounding the cryptocurrency market, market experts are maintaining a hopeful outlook.

These experts confidently discard the theory that the market is dead, emphasizing that there are reasons to be optimistic about the future of cryptocurrencies.

But why is crypto price tanking? Let’s take a look at some of the angles.

Traditional Banking VS Non-Traditional Banking

Is crypto really dead due to Traditional Banking?

Traditional banking refers to the old-fashioned way of banking with physical branches, face-to-face interactions, paper-based processes and of course government interventions.

In recent times, the collapse of traditional banks like Silicon Valley Bank, Signature Bank, and First Republic Bank, purportedly prompted the government to attribute the economic failure to the tech industry and cryptocurrency.

Allegedly, the government simultaneously took action against cryptocurrency firms while intervening in banks to prevent transaction processing and associations with established crypto entities. Consequently, this has presented challenges for institutional investors looking to engage with the crypto market. Without the participation of large investors, retail investors struggle to exert significant influence on the crypto market.

However, experts hold the belief that the current downturn in prices may be temporary, and they anticipate a future recovery as market dynamics evolve.

Prominent figures like Elon Musk and Apple have articulated their visions for a distributed online banking system, thereby raising questions about the viability and future of traditional banking. Many experts argue that the emergence of these innovative approaches to financial services suggests that traditional banking may be facing a significant challenge in the near future and crypto can’t die due to traditional banking system.

Government Policy

Is crypto really dead due to government policy?

The US government, particularly the Securities and Exchange Commission (SEC), has taken the stance that cryptocurrency should be considered a security and placed under SEC regulations. However, this viewpoint is highly debated and contested. The SEC has initiated lawsuits against numerous crypto firms, arguing that they fall under its jurisdiction, and these cases are currently being examined in court. One notable lawsuit is the prolonged legal battle involving XRP, which has been intentionally prolonged.

The largest crypto exchange in the US, Coinbase, has accused the government of unnecessary intervention and has filed a lawsuit against the SEC. Furthermore, there have been reports of Coinbase considering relocating its operations outside of the United States. This is just one example among several other firms experiencing similar issues.

see more – US tightens crackdown on crypto with lawsuits against Coinbase, Binance

However, according to experts, the blame for the crackdown on cryptocurrencies lies more with the US government as a whole, specifically the Biden administration and the Democratic Party. It is suggested that this crackdown is a strategy employed to divert attention from their perceived economic failures. Experts speculate that if the Republican Party were to regain power in the future, the situation might not be the same. Notably, former President Trump himself has been observed selling his own NFTs, indicating that he may not be fundamentally opposed to cryptocurrencies.

Russia Vs Ukraine War

Is crypto really dead due to Russia Vs Ukraine War?

It has been a widely held belief in the US and European governments that by removing Russia from the Swift banking channel and imposing economic sanctions, they could significantly weaken the Russian economy and eventually emerge victorious in their Russia vs Ukraine war. However, surprisingly, despite these efforts, Russia has managed to withstand the pressure imposed upon it.

In response, the US government launched investigations to uncover how Russia was managing to sustain its economic stability. It was discovered that Russia had been developing an international payment system using cryptocurrencies, conducting business through this alternative channel, and successfully navigating the challenges posed by the sanctions.

The revelation of Russia’s adaptability and innovative solutions in navigating Western sanctions has left the US and European governments concerned and determined to take action against cryptocurrencies. Faced with the realization that cryptocurrencies can offer an avenue for circumventing economic restrictions, these governments have decided to intensify their crackdown on the crypto industry.

Even more than that when Russia, China, and some Arab countries started making moves to challenge the US dollar’s global dominance, the US government went all out in their opposition to cryptocurrencies.

It seems like the US government got spooked by the idea of these countries trying to undermine the power of the almighty US dollar. They saw cryptocurrencies as a sneaky way for countries to bypass their economic control and wanted to put a stop to it, no holds barred.

So, they started cracking down hard on the crypto scene. It’s like they were determined to protect the US dollar’s empire at all costs, even if it meant taking a tough stance on these digital currencies.

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But you know what? This aggressive approach has sparked debates and raised eyebrows. People are questioning whether this crackdown might hinder financial innovation and the freedom that cryptocurrencies bring.

It’s a classic battle between control and innovation. The US government wants to maintain its dominance, while other countries are looking for alternatives and exploring new ways to conduct economic transactions.

As this global tug-of-war continues, we’ll have to wait and see how it all plays out. The future of cryptocurrencies and the balance of power in the financial world hang in the balance.

The Battle for Acceptance and Resistance of New Technology

Is crypto really dead before the battle for acceptance of new technology?

Throughout history, it has been a recurring pattern that every new technology faces a formidable battle for acceptance and resistance.

History seems to be repeating itself! It’s not the first time the government has gone all crackdown mode on new and shiny technologies. Let’s rewind to the 1930s, when the Great Depression hit hard. Banks were collapsing left and right, inflation was going bonkers, and folks were like, “Screw this paper money, we’re buying gold!” Well, guess what? The government wasn’t too keen on that idea and started banning the purchase of gold.

Fast forward to the 1990s, when the internet and those funky .com businesses started taking over. The government scratched their heads, completely baffled by this newfangled thing called the internet, and thought, “Hey, let’s ban it!” Oh boy, they quickly realized life without the internet is utterly impossible!

And now, here we are in the present, where the mighty blockchain and cryptocurrencies are shaking things up and challenging the ancient traditional banking system. But guess what? The government is scratching its head again, struggling to grasp the potential of this blockchain wizardry. So what do they do? You got it—crackdown time!

In this battle for acceptance and resistance, it is essential to recognize that change, however challenging, often brings about positive transformations and opens new realms of possibility.

America Matters

Is crypto really dead due to America?

Let’s break it down. You might be wondering why crackdowns happening in America have an impact on the rest of the world. Well, here’s the deal: when something major goes down in America, it sets off a chain reaction that ripples across the globe, affecting other countries too. It’s like a giant game of economic dominos!

Take an example of 2008, when the Lehman Brothers crisis hit America. That one event sent shockwaves throughout the world, causing widespread suffering and economic turmoil in other countries. It just goes to show how interconnected we all are.

Now, let’s talk crypto. Did you know that over 80% of cryptocurrency transactions happen in America? Yeah, it’s a staggering number. When you throw in Europe, it shoots up to over 90%. Asia and Africa are still catching up in the crypto game, so they’re like the new kids on the block.

So, when the US government issues policies and crackdowns on crypto, you better believe it’s gonna have an impact. Europe often follows suit, and that can seriously affect the economic sector. It’s like a domino effect, but in the world of money and digital currencies.

But here’s an interesting twist. The United Arab Emirates, especially Dubai, is stepping up its game in the crypto world. They’re building themselves up as a hub for all things blockchain and cryptocurrency. In fact, many crypto exchanges have set up their headquarters in Dubai and are flourishing like crazy. And guess what? China and Russia are backing these Dubai-based exchanges, adding some serious weight to their rise.

So, experts believe that if this trend continues, the US and other Western countries might find themselves playing catch-up, while Asian countries, led by Russia, take the lead. They believe Crypto won’t be dead —it’ll just be taking a little nap, waiting for the right moment to bounce back.

Conclusion

Alright, let’s wrap this up and make sense of it all. So, is crypto really dead? Well, the answer is a resounding no! Sure, recent price fluctuations and government crackdowns may have caused some doubts, but let’s not forget the history of this resilient market.

Think about it. The crypto market has faced challenges time and time again, yet it always manages to bounce back. Market experts are quick to remind us of this track record, emphasizing the potential for growth in the future.

So, while the US government’s actions may have an impact, it’s not the end of the story. Crypto is finding new homes and gaining momentum in other parts of the world. It’s like a hibernating bear, waiting for the right time to wake up and roar again.

In conclusion, the crypto market is not dead. It has a history of resilience, and despite the challenges it faces, it continues to show potential for growth. The crackdowns and fluctuations may make us question its future, but let’s not forget that innovation and acceptance often come with resistance. So, keep an eye on this fascinating market, because who knows what the future holds? It’s a wild ride, but one that’s worth being a part of.

Is crypto really dead? What do you say? Share your thoughts in the comment below.