With the onset of the calendar winter in the cryptocurrency industry, its own cold season has come. The “Crypto Winter” came gradually, and, it turns out, there are guilty ones in this phenomenon. The cryptocurrency rate, despite many positive predictions of experts, like the street thermometer, started showing declining trends. Who spurred the decline in the price of digital assets and how to survive the negative indicators?
The users themselves and those who see Bitcoin and other coins as the only way to earn money are responsible or the feverish state the entire cryptocurrency industry is now in. This was written in the column by Coindesk expert Michael Casey. He told a story about his friend, who “distributed coins to random people here and there,” thereby promoting cryptocurrencies. The problem was that Casey was talking about digital money as a way of getting rich, and not making unimpeded and fast transactions.
“Everything was fine, but my friend boasted that the crypto asset in its dollar value had previously cost much less than now. He said: ‘You can get rich like me.’ Such statements further embed speculative behavior. And my friend did not mention the main thing that Bitcoin has the potential to make unimpeded payments between users and financial institutions on favorable terms,” writes Casey.
The mania of earning, according to the expert, has created imaginary crypto enthusiasts who contributed to the revival of the blind faith called “earn on cryptocurrencies.”
“Remember, this was a time when an iced tea producer’s executives briefly showed that they could produce a miraculous share price increase simply by adding the word ‘blockchain’ to the corporate name,” says Casey.
For example, the New York beverage company Long Island Iced Tea in 2017 was renamed as the Long Blockchain Corporation. Although the company had nothing to do with cryptocurrency and the blockchain technology, their stock price soared almost 500% in the wake of the hype. As a result, the manufacturer aroused the interest of the SEC, and the latter began its investigation.
Now that the bubble has burst, it is time to get rid of the erroneous opinion about cryptocurrencies, because a new stage of development will take place, as the columnist of Coindesk is sure. In addition, people need to stop believing that cryptocurrencies are for the rich.
“For now, though, I still see this technology as a tool of the people, and therefore believe it can only succeed with mass adoption. I don’t care how it gets there—whether by widespread retail usage or by the back-office use of public blockchain architectures to foster a new, decentralized economy—the goal must be to positively impact lives everywhere,” says Casey.
How to Survive the Crypto Winter
There is neither a definite answer nor an accurate forecast of the cryptocurrency rate for the near future. The disappointment of the users in the value of the currency is expressed by various manifestations.
Method 1. Leave the industry. Forever and ever
The negative attitude toward cryptocurrencies began to take shape in early 2018 when informational messages started to appear that another project with the help of its ICO had collected the necessary amount for the development and did not realize its ideas afterward.
And then, when the course of most digital assets began to fall, some representatives of the crypto community began to convert their investments into fiat. Not only individual investors with small investments were disappointed in the diagrams of pumps and dumps but also well-known business angels.
For example, in early November, Jan Ning, a significant private venture investor who provided financial and expert support for projects, published a post on WeChat (later the text was deleted) where he announced his withdrawal from the Chinese crypto sector.
“It feels great to leave the crypto world that’s full of liars and gamblers. I was going to leave quietly but had to go against the whole crypto sector. I have deleted all the group chats and people [on WeChat]. If you are still in the crypto world and are able to read this post, it only means you are not ‘well-know’' enough. I have already lost my trust in the concept of the decentralized blockchain. Blockchain can only grow under the centralized structure of laws and regulations. [This is] the last time I commented on this decision,” said Ning, who launched his Commerce Data Connection project in January 2018.
Commerce Data Connection was announced as the first decentralized platform with free access for all users with a CDC token. The coin was listed on the Huobi exchange, but five months later, the CDC was pulled out due to violations of the rules of the trading platform. After that, Jan Ning gave an interview and told that “bad actors” were to blame for the incident without explaining the term. Now the angel investor refuses to associate himself with the crypto industry, where there are only “liars and players.”
Method 2. Pay attention to the altcoins
Most digital assets are showing a downturn. In particular, Bitcoin, which cost over $11,000 on December 5, 2017, is currently trading at around $4,000. The decline of Bitcoin over 12 months was about 67%. Other coins, less noticeable at the time of the high cost of Bitcoin, are showing a positive trend. The founder of the Digital Currency Group, Barry Silbert, believes that the market decline is a great opportunity to buy new crypto assets. He bought ETC, ZEC, MANA, and ZEN.
In the green corridor is Binance Coin (BNB). The increase by 20% probably happened because the Binance exchange, which owns the BNB token, announced a quick launch of its blockchain and decentralized trading platform. In addition, the founder of the marketplace, Changpeng Zhao, after dinner with one of the founders of CoinMarketCap, made himself a tattoo with the Binance logo. This inspired traders who have increased the value of BNB.
Another coin that showed growth is Waves—plus 30% on December 5th. But these figures are not the maximum, because FREE Coin, for example, soared by 240%. And the Factom coin rose almost 40% after listing on Coincheck. The inclusion of new digital assets, analysts say, against the backdrop of Bitcoin, will strengthen the period of multiple altcoin pumps.
Method 3: Work in a falling market and pay attention to the technology
As professional traders have repeatedly stated, you need to be able to take advantage of both the falling and the growing market. To do this, you need to know the basics of trading on cryptocurrency sites. It is important to distance from the negativity, which is now present in the cryptocurrency industry, and pay attention not to the cost of coins, but to the blockchain technology itself. For example, the co-founder of the Ethereum network, Joseph Lubin, said that the price of cryptocurrencies (Ether is being traded around $100) does not reflect the value of the blockchain project.
“Blockchain is more than a market. It’s a movement. Market cap doesn’t reflect (sic) activity. Decentralized networks are growing. 10 billion daily API requests served by Infura. 1 million Truffle downloads. 1 million MetaMask downloads. 12,000 live Ethereum nodes. 48 million unique Ethereum addresses. 3 times LinkedIn blockchain job openings,” says Lubin.