The current volatile cryptocurrency scenario strikes an extreme similarity with the events from 2017.
- As per analyst at Vanda Research, the current scenario strikes an extreme similarity with the events from 2017.
- The public interest can shift from Bitcoin to other such currencies like Ethereum and Dogecoin in the coming days.
- The biggest claimed flaw of the the currency is that its mining is controlled majorly by a “handful of big mining (aka hashing) companies”.
Major cryptocurrencies such as Bitcoin and Dogecoin, are experiencing a topsy-turvy ride since mid-2020, which has continued in 2021 as well. The growing public interest in digital currencies and the unstable growth are coming as a reminder of the 2017 statistics to experts.
Since mid-2020, several business giants have taken a major interest in various cryptocurrencies. Popular entrepreneur Elon Musk has become the number one influencer for digital currencies such as Bitcoin and Dogecoin. The high corporate interest has worked as a catalyst in the public’s growing interest in these currencies.
Microsoft had been the pioneer in accepting cryptocurrencies as payment when they started to accept bitcoin payments for apps, games, and other digital platform purchases in 2014. Since then, several big companies have shown interest in cryptocurrency investments. In early 2021, Elon Musk’s Tesla announced their decision to accept bitcoin for their car purchases and sent the cryptocurrency market on a roller coaster ride. The renowned multimillion-dollar coffeehouse chain Starbucks, also accept bitcoin as a payment method from their consumers. The popular American e-commerce website Etsy also encourages bitcoin payments for their sellers. The American online payment system PayPal will be another major company to accept bitcoin in their platform.
What is Happening with Cryptocurrency?
The blooming digital currency, Bitcoin had been drawing a big chunk of the crypto revenue until it experienced a major drop last month. The digital currency witnessed a major plunge up to 30 percent and the price near to $30,000 at one point this week. This also continued the ongoing trend of cryptocurrency sell-off that began a few weeks ago. Not only did the sell-off continued but some of the popular crypto-asset holders like Tesla suspended all trades using digital currency for a period.
Find more statistics at Statista
The price drop had also been happening for cryptocurrencies other than Bitcoin, such as – Dogecoin and Ethereum Blockchain. One of the major reasons of this plunge would be Elon Musk’s announcement over Tesla suspending their trades with the currency.
In his Twitter post, the American entrepreneur has mentioned how the currency is controlled majorly by a “handful of big mining (aka hashing) companies”. He is concerned by the negative environmental effect of fossil fuel-powered bitcoin mines as well as the highly centralized structure of mining operations.
Cryptocurrency Market similarity between 2017 and 2021
According to the analysts of Vanda Research, the current scenario of the cryptocurrency market in 2021 strikes an extreme similarity with the events from 2017. To explain the events, the partner and senior strategist of the firm, Ben Onatibia mentioned how the Bitcoin price rise transferred into a jump in interest for other less-popular digital currencies. In his report, he has mentioned how “investors rotated to lesser-known altcoins like ripple and ethereum” as the Bitcoin surge started to slow down in 2017.
“investors rotated to lesser-known altcoins like Ripple and Ethereum” as the Bitcoin surge started to slow down in 2017.Ben Onatibia, partner and senior strategist, Vanda Research
The expert analyst has also mentioned how the cryptocurrency market can follow the same path as it did in 2017. As an example, the analyst mentioned how investors have now started to show interest in other cryptocurrencies such as Dogecoin. He has also pointed out, how the support from the Tesla CEO has failed to help Dogecoin with a full recovery of its price.
As the cryptocurrency market goes, the price drop has surely rattled the entire Bitcoin investors community – the veterans and new ones who joined the brigade in the last few months following the brilliant price surge of the currency. With such a major plunge of Bitcoin and other such currencies, investors have started to either retract or sell off their crypto stocks, which are having a negative impact on this market. This, followed by the growing popularity of digital currencies like Dogecoin, can have a major negative impact on the Bitcoin market.
In his report, Ben Onatibia has mentioned how the public interest can shift from Bitcoin to other such currencies like Ethereum and Dogecoin in the coming days. There are possibilities that major investors can shift their crypto investment from Bitcoin to its competitors in the following months.
This change will not only impact the Bitcoin market but the cryptocurrency market overall. Onatibia has expressed his concerns over the digital currency market saying, “a correction in crypto” might actually “push retail investors back into equities.” So where will the cryptocurrencies such as Bitcoin be left, if something this comes true in the future?
Find more statistics at Statista
It might turn out quite bad in the meantime, but it will surely recover. Cryptocurrencies are here to stay and it is almost as expected as the sunrise the next day. We are going through major digitalization from the beginning of the 21st century and it has only sped up since the end of the last decade. So, in this trend of digitalization, the digital currency will surely not be vanquished by other forms of currencies. The rise might slow down or run on the negative side for some time, but we can surely expect the cryptocurrency market to make a full recovery in the near future even in 2021.