If you look at the media landscape at the moment, you will see that the negative headlines in the #crypto sector are not coming to an end. After many crypto coins had to accept a loss in value of up to 80% and failed projects such as #Terra #Luna and the crypto #exchange #Celsius cost numerous #investors their entire fortune, one reads again and again about the crypto #crash and the imminent end of the crypto scene. Is there really a crash at the moment and what do you think of negative headlines of this kind? We will give you an answer in the following lines.
Where wood is chopped, splinters must fall
Since the beginning of #cryptocurrencies, there have been neutral observers as well as harsh critics of the crypto revolution, which arose when the inventor of #Bitcoin came up with the idea of creating a digital currency that is organized decentrally, dedicated to the new type of blockchain technology and offers protection against inflation per se.
Recently, it has been these tough critics in particular who have been talking about the demise of cryptocurrencies and the inevitable crash. In fact, many cryptocurrencies are currently going through anything but a rosy time, as they serve many investors as an investment and behave in a similar way to stocks – unfavorable global economic events are increasing the risk aversion of investors in the market and causing prices to fall.
No deeper market understanding available
However, what is completely ignored in reports on the ailing crypto market is the fact that all cryptos are often lumped together and many journalists lack a deeper understanding of the market. Established projects such as the #Ethereum #blockchain or #Solana with smart contract applications can by no means be compared with central crypto exchanges (Celsius and Co.), which represent the opposite of real #DeFi solutions and are therefore currently rightly subject to a market shakeout. In the past there have always been times when #Bitcoin and other coins have had to accept large percentage losses in value, but have never completely melted. Incidentally, the same thing was predicted about the Internet during the dot-com bubble, so that there were actually opinions at the time that said the Internet would not last and would hardly have a greater impact on the global economy than fax machines.
Given the current situation, one could say that the wheat is being separated from the chaff and providers who lure unsuspecting investors with promises of returns of up to 18 percent deserve nothing more than to go bust. The coded incentive systems of blockchain technology, on the other hand, are indestructible and have survived the current market shakeout with flying colors. Since new providers can learn from the mistakes of old providers, the DeFi sector will in all probability be able to better exploit its advantages over the traditional financial world in the future and experience a new upswing with regained purchasing power.