Winter. Crypto winter.

The crypto hype is over. Nobody flies to the moon anymore. The “Lambos” are parked in front of the deep red crypto depots. And the very stupid are heavily in debt. And as is so often the case, many people are repeating the same mistake they made a year ago. Simply in the opposite direction.

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What goes up must come…

By the end of December, it must have been clear to everyone that the rapid appreciation of cryptocurrencies could not go well. Either the entire financial system would be turned upside down within a year, or the speculation surrounding cryptocurrencies would have to calm down again.

I wrote at the time that the rapid adaptation of cryptocurrencies is now crucial for their long-term success. I saw a major player, namely Apple or Amazon, in the leading role in this adaptation. I also thought, and this is not mentioned in the article, that banks would be much quicker to use products such as those from Ripple. Well, neither has happened. Admittedly, Ripple is not doing so badly on the bottom line. But it is miles away from replacing Swift.

It is probably due to my excessive desire for change and upheaval that I assumed that rapid change could actually take place. I obviously underestimated the enormous influence of the financial world on these issues. I thought cryptocurrencies could play a more significant role in 2018.

Fraud

What has certainly played a major role are the numerous cases of fraud surrounding ICOs. They have put serious and honest projects in a bad light. Obvious fun or nonsense projects have not exactly helped the reputation of the crypto scene either. And the fact that various prominent wisps such as McAfee have prostituted themselves on the subject was and is simply disastrous. As a result, Swiss banks, for example, no longer even let crypto companies open a normal bank account.

Lambo

And many people unfamiliar with the matter obviously assumed that the price increases would simply continue. Correlations in statistics are a dubious thing. It’s funny, however, that according to Google Trends, the term “lambo” was most searched for in the same two weeks in December 2017 in which the Bitcoin price reached its all-time high (5 years ago, mind you).

(Google Trends search term “Lambo” – 5 year comparison)

 

(Bitcoin price development – 5 year comparison – https://www.buybitcoinworldwide.com )

In the meantime, both values have relativized again to a certain extent. Bitcoin, and with it many cryptocurrencies, have nevertheless gained in the long-term trend. Yes, I know that if things continue like this over the next few weeks, this will also disappear again.

Hodl until it hurts

I have met a few people in recent weeks who have now sold their coins at a loss. I think that’s just as wrong as buying them en masse in the euphoria.

Because the long-term transformation of the financial system has not been canceled at all. It’s just crypto winter right now. Everything is simply taking longer and, as much as many of us would like it to, there will probably be no revolution.

It is probably better that way. The forces that we all put into today’s system cannot simply be diverted. There are far too few predetermined breaking points.

It is quite possible that, similar to the dot-com bubble, it first had to come to excesses and the taking of wrong paths in order to then fully develop the advantages of the technology downstream. And yes, who really knows whether the Ethers, XRPs and Bitcoins of this world will still have value?

One scenario that is often circulated is that cryptocurrencies could benefit as a fallback investment option in the event of a financial crisis. In principle, I don’t think this is far-fetched. I also see some signs of a crisis. But it’s not a great prospect either way.

Spring is coming again

One thing, however, is certain: blockchain technology is here to stay. It still needs massive improvements and I also believe that it still has to find its place in the economy. But using it to create electronic currencies is certainly a good idea. Unfortunately, as is so often the case, there is no shortcut to places worth going. Now that the feverish gold diggers are slowly leaving the river, the real work begins. And the wheat is separated from the chaff.