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Why is crypto falling and how can we fix it? Let’s take a look at the current state of the market and some potential solutions.
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Crypto is falling because…
Crypto is falling because it is too volatile, it is not being used enough, and there is too much regulation. These are the three main reasons why crypto is falling.
There’s too much speculation.
Crypto is falling in value because there is too much speculation and not enough actual use. Cryptocurrencies are meant to be used as a form of payment, but most people are holding onto them in the hopes that they will increase in value. This has created an unstable market and has led to a lot of volatility.
To fix this, we need to get more people using cryptocurrencies for actual purchases. Merchants need to start accepting them as a form of payment, and consumers need to start using them instead of traditional currencies. Once there is more real-world usage, the market will become more stable and the prices will start to rise.
The infrastructure isn’t good enough.
One of the main reasons that crypto is falling is because the infrastructure isn’t good enough. There are too many exchanges, wallets, and other services that are either unreliable or have poor customer service. This makes it difficult for people to trust cryptocurrencies and feel confident about using them.
In order to fix this, crypto businesses need to focus on building trust with their users. They need to provide reliable services and make it easy for people to get help when they need it. If crypto businesses can do this, then more people will be willing to use cryptocurrencies, which will help the industry grow.
The technology isn’t ready yet.
There are a lot of reasons why crypto is falling, but one of the biggest is that the technology isn’t ready yet.
This is both a technical and a cultural problem. On the technical side, blockchain technology is still in its early stages and has a lot of potential’m sure you’ve seen the headlines about how blockchain is going to revolutionize everything from banking to supply chain management. And while that’s all true, it’s going to take time for those applications to be built and adopted. In the meantime, there are a lot of projects out there that are trying to do too much too soon, and they’re not ready for prime time.
On the cultural side, there’s a big problem with trust. The crypto industry is full of scammers and people who are just trying to make a quick buck. That’s not necessarily evil, but it does mean that people are rightly suspicious of anything and everything in this space. That suspicion has been amplified by all the media attention on crypto, which has focused on stories of people getting rich quick or being scammed out of their life savings.
The result is that crypto has developed something of a Wild West reputation, which is not conducive to mass adoption. Until there’s more trust in the system, it’s going to be hard to get people to use crypto for everyday transactions.
How to fix it…
Bitcoin, the first and most well-known cryptocurrency, has fallen sharply in value since its peak in December 2017. It is now worth less than half of what it was then. So, what happened?
Improve the infrastructure.
If we want to fix the crypto industry, we need to start by improving the infrastructure. The exchanges are rife with problems, and they need to be fixed. The most pressing issues are:
1. Lack of regulation
2. Poor security
3. Manipulation
4. Lack of insurance
5. Fragmented liquidity
We need to create a better infrastructure if we want to attract more institutional investors and grow the industry. Institutional investors are not going to put their money into an industry that is this risky and unregulated. We need to show them that we can operate in a safe and clean manner if we want their money.
Build better technology.
In the past year or so, crypto has seen a lot of bad press. From hacks to outright fraud, it’s been a tough time for the industry. But while the headlines have been dominated by the negative, there are plenty of people working hard to build better technology and bring crypto back to its original promise: to be a better way to store and exchange value.
One way to build better technology is by focusing on security. While no system is ever 100% secure, there are plenty of ways to make crypto more secure than it is today. For example, many crypto-exchanges don’t require two-factor authentication (2FA) for withdrawals, which means that if someone gets your password, they can steal your coins. But if exchanges required 2FA for withdrawals (and ideally, for all account access), it would be much harder for hackers to steal coins. Similarly, some wallets allow users to store their private keys in an unencrypted file on their computer — if their computer gets hacked, their coins are gone. But if wallets offered “cold storage” options — like storing private keys offline on a USB drive — it would be much harder for hackers to steal them.
Another way to build better technology is by making it more user-friendly. Many people find crypto confusing and intimidating — but it doesn’t have to be. There are lots of ways to make crypto easier to use, from simplifying the process of buying and selling coins to building user-friendly wallets that don’t require users to understand complicated technical concepts. Making crypto more user-friendly will make it more accessible and understandable to the average person, which will help bring more people into the fold.
Finally, another way to build better technology is by increasing transparency and accountability in the industry. Today, there are plenty of “exit scams” — projects that raise money from investors and then vanish without a trace — as well as outright fraudsters who create fake projects or ICOs in order to steal people’s money. But if we can increase transparency and accountability in the industry — for example, by requiring ICO projects to publish regular progress reports or submit their code for auditing — we can help weed out the bad actors and build trust in the industry as a whole.
None of these solutions is perfect, but they’re all steps in the right direction. If we want to fix crypto, we need to start by building better technology.
Reduce speculation.
Cryptocurrencies have been in a slump for much of 2018, and there are a number of factors that have contributed to the decline. One of the primary reasons for the sell-off has been the increase in speculation in the market.
When prices are rising rapidly, as they were in late 2017, there is a tendency for investors to buy assets not because they believe in the long-term prospects of the asset, but because they believe they can sell it for a higher price in the future. This speculative activity can lead to significant price volatility and can ultimately lead to a market crash.
To reduce speculation in the market, it is important to have clear regulations that provide certainty for investors. Furthermore, exchanges should be required to institute strict Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures to prevent investors from using cryptocurrencies for illicit purposes. Finally, public awareness campaigns can help educate investors about the risks associated with speculative investing.
