Most of the cryptocurrencies including the digital gold, Bitcoin (BTC), have been seeing a downtrend since Nov. 2021, when the markets were at their best and crypto hit an all-time high of $3 trillion. Consequently, some believe that BTC is dead for the 458th time.
Bitcoin’s criticisms have repeatedly surfaced when markets are hit by regulations, tightening policies, or rate hikes. According to data from 99Bitcoins, the largest cryptocurrency has been called “dead” at least 458 times since 2010. From that count, 19 cases have been recorded this year.
However, the Co-Founder of ReSource, Ashley Taylor Buck, believes that Bitcoin is still alive “more than ever.”
“This is the strongest use case for a neutral, non-partisan third currency system. It is the only truly decentralized, large-scale network that will handle the volume of money needed for sovereign states and states to -nations trust each other and transact with each other. There is also no chance that it could go away because blockchain runs on satellites in space,” Buck told Be[in]Crypto.
According to Buck, two of the most important reasons, on a macro level, responsible for the latest crypto crash are the US Federal Reserve’s (Fed) rate hike “to alarming levels” and mass overleveraging with margin calls and liquidations.
The wave of Celsius Network liquidations has also had a major impact on the decentralized finance (DeFi) ecosystem. Buck believes Celsius’ recent actions will potentially cause long-term damage.
“There’s also a lack of solid investments available in the crypto space, more so speculative investments based on future potential. Whenever there is a shock to the system like this, it exposes the lack of real-world blockchain foundations,” she said.
Earth and Moon
Terra (LUNA) and its sister stablecoin TerraUSD (UST) could also have triggered this year’s crypto crash when both coins started losing value in early May. The stablecoin lost its peg to the US dollar and while LUNA was used to fix the mess, it lost its value by almost 100%.
The Luna Foundation Guard (LFG) had to sell its Bitcoin reserves, worth roughly $3.5 billion, to save UST and LUNA. However, Terra co-founder Do Kwon had to create another plan, which eventually failed again.
While watching short-term projects come to an end, Buck believes that the real investment that has entered the space is now marked, and with macro-systemic issues outside of crypto, market recovery is highly dependent on the development of economical solutions.
“The systemic issues are here to stay – we must develop new models with long-term viability as a priority to get through this phase,” she added.
Is there any hope?
The crypto space has lost around two-thirds of its unprecedented total market capitalization since November 2021. However, with current bullish moves and funding, the $130 million Magic Eden deal, for example, the market has also showed signs of hope. . According to data from CoinMarketCap, the market capitalization of the industry is consolidating around the $940 billion mark.
Buck says that the real projects will continue to build, and the fundamentals are still intact. She says that the retail perception and trust of the space have changed due to the circumstances, and they will take time to recover because it’s “hard to bring trust back.” She expects to see the emergence of more impact-focused projects, particularly in the Reimagined Finance (ReFi) space. Buck added:
“We will likely see more liquidations and a market clearing of mediocre projects. However, some good projects will also die. In the long term, Web3 will become the next layer of the Internet in 5-10 years, and now there are good opportunities for investors to get low valuations, and this will continue for the rest of the year.
