Could a Financial Crisis in 2019 Bring an End to Cryptocurrencies?
Cryptocurrencies were the new revolution in the investment market since they were created and today, they represent a very popular financial current that finds new investors every day. Ever since the colossal rise of blockchain technology in 2017, when many people turned from regular individuals to millionaires, amateur and professional investors are looking more and more at cryptocurrencies and choose to gamble on them. The popularity of cryptocurrencies increased spectacularly when the price went up, so the majority of people now know the basics of a cryptocurrency coin. However, many specialists think that the volatile crypto market increases the chance of a new financial crisis, similar to the one we had a few years back.
The interest in blockchain technology has been up and down since 2017, which makes people wonder if this is the end of it. Plus, investors are wondering if they should continue to take cryptocurrencies into consideration as an investment and if this new technology will survive a possible economic crisis. Are there reasons for them to be suspicious? If a financial crisis happens in 2019, will that be the end of cryptocurrencies? Let’s take a look at cryptocurrencies right now and reasons why they will or will not disappear in case of financial troubles.
There are many types of cryptocurrencies on the market, such as Bitcoin, Neo, Litecoin, Stellar Lumens, Ripple, QASH, etc. All these coins come with risks and benefits, but if the market crashes, all of them can disappear. Right now, many of these cryptocurrency coins are popular among enthusiasts and Bitcoin, including Litecoin, which are dominating the market – Bitcoin can be seen as Gold while Litecoin can be seen as Silver.
Bitcoin – today and tomorrow
Bitcoin is possibly the most famous cryptocurrency right now – it was the first coin of this type ever invented, and it also brought the most profit to those who invested in it early. A bitcoin was worth under $1000 before December 2017, and it went up to $20,000 in just a few months. Right now, the price has gone down to under $7000, but the bitcoin market seems a little bit more stable than it used to be and it appears to be a good sign. However, bitcoin influences the price of other coins as it was the first coin and has the biggest popularity on the market. Most people only heard of bitcoin and know nothing about other cryptocurrencies, which led us to believe that bitcoin is the strongest coin on the market right now. For example, Litecoin depends solely on bitcoin – if this market will crash, is bitcoin strong enough to recover? And if so, will it be able to increase the trust of investors and people so much that the entire cryptocurrency market won’t fall?
Is the crypto market in a position to survive a crisis?
The blockchain technology is thriving right now as we see how a niche promoted by tech enthusiasts went viral on the financial market and attracted plenty of investors and admirers. We see businesses and governments getting involved in this new technology, investing billions of dollars into researching and developing this new type of technology and its digital assets. Plus, cryptocurrency seems to be the center of attention for politicians that are looking for ways to regulate and include it in our daily lives. This is one good news, but the blockchain market is still growing right now and, with a new financial crisis knocking on the door, it may not have the strength to resist a thorough period.
The cryptocurrency market could break for one simple reason: the masses did not adopt it yet, and they need more time to take it in and understand how this new technology could help them in the real everyday world. As with any other major change, people need to be ready to accept a new order of things, and more importantly, they need to be educated about it. Right now, cryptocurrencies are just instruments that could make you rich if you are willing to risk a sum of money from your own pocket. Regular people or amateur investors do not perceive cryptocurrencies as a new way to trade in value for objects, but as another investment opportunity that will go down eventually. This is one very important reason why the cryptocurrency market has major chances to get disrupted in the case of a financial crisis.
How could the perceptions change?
However, a financial crisis could also change the way people perceive cryptocurrencies and could also make them adopt this new blockchain technology rather than reject it. Cryptocurrencies might become necessary in the case of a new economic crisis. Why? Well, if a financial crisis strikes, the government usually try to keep the money in the country to pay for necessary things – the inflation can go to the roof and money will actually lose its value. You can wake up one day and find out that you can only buy bread with your paycheck. Wouldn’t that be terrifying? That would be the moment when you can turn to cryptocurrencies – this technology can protect the value of your assets in case of economic crisis. Take the example of Venezuela or Greece – in the same given circumstances, other countries, such as Singapore, USA, Great Britain, Italy or China, will probably act the same way.
Verdicts are not easy to be made – we know there will be another financial crisis, but we cannot predict it. We know the cryptocurrencies will be affected in case of a financial crisis, but we do not know how. For example, some experts believe that a global economic crisis could accelerate investment in other values than money and that bitcoin will be the most popular and will absorb the highest capital percentage.
Therefore, the road has two ways for cryptocurrencies in case of financial crisis in 2019 – either the coins will go down with almost no chance to relapse and make a comeback, or it will represent the best answer for people in the countries where the recession takes place as they are usually the most affected and want the value of their assets to be protected.