It doesn’t seem like all that long ago where experts were raving about the huge amount of potential that could be on the horizon for the growing numbers of decentralized currencies, with crypto being promised as this big change, it certainly attracted a huge number of investors. It seems the hopes were meeting the promise too as the prices had continued to increase and as possibilities started to be found in more mainstream use with the potential use of Bitcoin to buy a Tesla before hopes were dashed due to environmental concerns, as well as the wider use in other online services particularly through online gaming as some here have become more reliant on Bitcoin too. Things have quickly changed however, and there’s a lot of uncertainty ahead for crypto as a whole, but what has changed?
Environmental concerns have hit harder than some thought – Whilst the carbon footprint of Bitcoin and other big cryptos had largely went unnoticed, the launch of NFT’s earlier in the year brought more attention around just how much energy is required for the different blockchains and crypto, and once the cat was out of the bag it was only a matter of time before it spread and these concerns quickly mounted on the bigger coins too. It was a core part of the reason why Tesla pulled out of the proposed offering with Bitcoin, and the subsequent fall in price, but also a big part of the reason why one of the largest countries in the world may be turning its back on the decentralized currency too.
(Image from cnbc.com)
China’s crackdown on crypto – Although bitcoin is the primary target here, China cracking down on crypto as a whole will certainly lead to future uncertainty for all major decentralized currencies. With a huge part of the mining taking place in an industrial scale in China, it isn’t something that can be easily up and moved, particularly if other countries aren’t willing to welcome to huge power demand it brings. This crack down may be just as impactful on changing the perception and the use of different crypto offerings, and may be a continued reason as to not only why uncertainty will remain, but why crypto could fall back into a position it had been much earlier on.
The fight for legitimacy will always be a core problem here, and these issues don’t work in favour of the biggest coin offerings, and hurt the smaller ones further too – for now it doesn’t seem like there’s a way to step forward again, and the future does look a little bleak. Volatility for pricing is nothing new, but a 50% drop over a short period of time from the all-time high certainly doesn’t inspire confidence for many.