There is no doubt that cryptocurrency — specifically Bitcoin (BTC), which is frequently used as a barometer for the health of the entire sector — has made a comeback. As of the writing of this article, Bitcoin stands at a little over $9,000, very close to the $10,000 rebound that investors hoped for sometime this year — and we are barely in the third quarter.
Although there are signs that crypto winter is over, many experts are still understandably cautious.
Related: What’s Next for the Industry as ‘Crypto Winter’ Thaws?
Cryptocurrency has been a notoriously unstable investment, first selling at less than a penny and then varying from $400 to $1,242 between all of 2013 and 2016. In 2017, crypto investors were gleeful (and some, probably, quite smug) to see the currency reach the insane height of $4,400 and then end the year breaking an astonishing $20,000 — all this after plummeting to $2,000 that same September.
Of course, what followed that bright season in the cryptocurrency industry was what we refer to as crypto winter — the drastic drop in value following several high-profile Ponzi schemes, successful hacks, crypto-jacking attempts and overall negative media coverage.
In this article, we will discuss the question of whether crypto winter is over, whether those who have already invested have a reason to be hopeful, and whether those who haven’t should jump on the bandwagon soon before prices skyrocket. We will also place a focus on blockchain technology as it exists both inside and outside the cryptocurrency industry, and why widespread adoption of this new technology is an indicator of cryptocurrency’s future success.
Is crypto winter over?
For many of the experts, the answer seems to be “yes.” From crypto enthusiasts to Forbes, the current viewpoint of many is that Bitcoin is poised to make huge gains for the next 10 years. Although the vagaries of the cryptocurrency industry are as mysterious as Satoshi Nakamoto himself, it seems that we have headed into a period of stability during which the fundamentals of cryptocurrency are better understood and trusted.
Only 4% of Americans polled cite cryptocurrency as their preferred long-term investment, but this is very likely going to change in the near future, as Bitcoin has nothing but room to grow.
Many compare the future of Bitcoin to that of the internet, and claim that the commodity is going through the same growing pains of scalability, availability and ease of use that the internet first went through from 1995.
Similarly, market experts note that although only 11% of Americans own Bitcoin, those numbers are on par with other huge technological developments in their early stages, such as smartphones.
Many point out that the disruption caused by the coronavirus outbreak to traditional banking and investing institutions may be a motivator to invest in the digital currency to protect against inflation and the questionable resilience of fiat currencies.
Many experts also suggest that cryptocurrency transactions aren’t completely secure and anonymous without the use of a virtual private network, or VPN. They are also irreversible. Once a coin is gone from your account, it can easily vanish without a trace. Hackers have taken advantage of this by breaking into exchanges and stealing small amounts from each user.
So, it will likely take time until Bitcoin gains trust from the wider public, but for those willing to take a risk, it might be the most profitable investment of 2020, specifically for those who are willing to wait 10 years to witness the true extent of its growth.
Blockchain — The real winner behind cryptocurrency
Although much is left to be seen about the future of cryptocurrency, no one can deny that the idea of creating a digital-only currency is as old as science fiction. From transportation to food to medicine to video games, a wide variety of industries continue to look to blockchain technology for logistical and transactional solutions. In seven years, it is estimated that $300 billion worth of food products will be tracked using blockchain technology, saving over $100 billion annually.
In 2018, JPMorgan surprised the traditional financial world by publicly stating that blockchain technology is the way of the future for cross-border payments. A year after that, IBM, Citibank and Barclays announced the development of their own blockchain-based platforms, and Dubai made a statement that it has a new goal to become blockchain-powered by 2020.
Although this is still a relatively new technology, there is little doubt that blockchain and the cryptographic technology it uses will rapidly dominate the landscape in coming years. Countless top-tier engineers, product developers and designers are building real solutions on top of blockchain, working to perfect this technology for widespread use across various industries.
It is possible that we may have to wait until blockchain technology is fully understood, utilized and appreciated by the masses in order to provide cryptocurrency a much-needed publicity boost.
After all, although currencies and monetary investments like cryptocurrencies can go through wild ups and downs, there is nothing more stable than an already proven and reliable technological solution like blockchain.
Ready for some spring cleaning?
Many unanswered questions and problems that still exist are unsettling to cautious investors, but these obstacles bear resemblance to other successful, ground-breaking technologies such the internet and Apple smartphones. Furthermore, much of the negative press about the problems associated with Bitcoin is due to scams that could have been easily avoided with adequate financial knowledge and cybersecurity.
Also, let’s not forget that traditional banking institutions have a vested interest in making cryptocurrency seem like a questionable investment. Of course, big banks and traditional investing platforms have significant power to fund research and news stories that influence opinions on a daily basis. This might be more of a reflection of their fear of competition rather than a legitimate portrayal of the value of the cryptocurrency industry.
Certainly, if you prefer safe and reliable investments with moderate-to-low gains in the short term, Bitcoin is probably not the right investment for you.
However, if you are looking to potentially gain big by investing in a growing new industry, and are not afraid of the “spring cleaning” that is currently needed to make improvements to the future security and useability of cryptocurrency, it might be just the right time to buy Bitcoin.
After all, where there is no risk, there is no reward — and it may be wise not to wait until everyone is singing the praises of Bitcoin in the coming years to make the decision to invest.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, you should conduct your own research when making a decision.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cryptox.
Sam Bocetta is a freelance journalist specializing in United States diplomacy and national security with an emphasis on technology trends in cyber warfare, cyber defense and cryptography. Previously, Sam was a contractor for the U.S. Department of Defense, working in partnership with architects and developers to mitigate controls for vulnerabilities identified across applications.
