The end of an era? What this new wave of crypto dip means to new projects

Cryptocurrency has experienced extreme growth over the past years. What was initially thought of as a mere bubble has now become one of the major players in the finance industry. However, the whole cryptocurrency space is now experiencing a major dip. Tokens that were supposed to be stable are now continuously changing. Despite that, numerous new projects are launched everyday. Are they too late with the cryptocurrency adoption or is a new era beginning?

Bitcoin, a major cryptocurrency, saw a temporary drop from $30,000 for the first time in ten months. Meanwhile, the total value of cryptocurrencies has dropped by about $800 billion in the last month. In addition, one of the trendy stablecoin, LUNA, is slowly losing its value, when it should not. What was the reason?

Since cryptocurrency is decentralized, it is hard to identify the underlying reason why the whole ecosystem is down at the moment. However, there are few things to blame for such a dip. Inflation, increasing interest rate, and the never ending commotion between countries are huge factors.

The crash of UST, however, caused another knock in the broader market, owing to the fact that Terra founder Do Kwon had purchased billions in Bitcoin as a safety net for UST. He exerted downward pressure on the market when he and the Luna Foundation Guard invested more than $3 billion to defend the peg, leading other significant investors to dump their Bitcoin shares. Bitcoin fell to its lowest level since December 2020, and Kwon’s attempt to preserve UST failed.

The repercussions were felt across the whole crypto community. Because companies sold about $30,000 of Ether to preserve UST’s peg, the cryptocurrency fell below $2000 for the first time since July 2021. As additional investors attempted to cash out their Ethereum-based stablecoins, the volume of transactions led Ethereum’s transaction costs to rise, causing even more money to be lost.

Can crypto recover?

The future of cryptocurrency remains undetermined. JPMorgan Chase, Morgan Stanley, and Goldman Sachs are among the Wall Street businesses that have cryptocurrency teams. Meanwhile, traditional hedge funds led by Alan Howard and Paul Tudor Jones are investing billions in digital currencies.

“Compared to 2018, there are more institutional investors with exposure to crypto, and most see this as a buying opportunity,” Paul Veradittakit, partner at digital asset management Pantera Capital, told Bloomberg.

“What gets penalized when financial conditions tighten?” Brian Nick, Nuveen’s chief investment strategist, told Bloomberg. Anything with a high market value but a shaky or non-existent revenue stream.

“Moreover, cryptocurrency has very high values but no revenue source.” That fits in nicely with what we’re seeing in growth stocks and technology. It’s correlated, but because the market is less liquid, it’s certainly more volatile.”

Furthermore, there are new players in the industry who have a significant earning potential. For example, despite its young age, Shiba Inu is currently one of the most amazing cryptocurrencies.

More bitcoin platforms are also being launched on a daily basis. Everyone wants to be the next big thing in the crypto industry. With all of these, the future of cryptocurrency still looks promising.

PrivacySwap as one of the platforms

PrivacySwap intends to deliver a service that will allow our users to utilize it for a longer period of time–both on the blockchain and in the real world. Our goal with the PrivacyCard is to provide traditional investors with crypto benefits while also providing crypto users with traditional finance services. As a result, we are optimistic that PrivacyCard will provide a solid bridge between DeFi and Fiat, perhaps contributing to the longevity of cryptocurrencies.

How? PrivacyCard was created to address one of crypto’s most pressing issues: scalability. The ability to use your cryptocurrency as a direct payment will limit conversions, which could result in excessive gas fees, network congestion, and other issues. More consumers may start investing in cryptocurrency if they learn about the benefits of crypto debit cards like PrivacyCard. As a result, if more people utilize cryptocurrencies, the digital assets may last longer and grow more.

Furthermore, we aim to support as many tokens as possible. With that, we can provide service to a broader network.

In conclusion,

There are lots of behemoths in the crypto space, and our platform represents a very small part of the whole ecosystem. However, thanks to our versatility and unceasing growth, we are positive that we will be able to give the service that our clients demand.

Discover more of what we have to offer right now by learning more from us.

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