Last Updated on: 22nd November 2023, 04:16 pm
Cryptocurrencies famously had a very rough 2018. In 2017, cryptocurrencies rose dramatically in price, led by bitcoin’s surge to just under $20,000. The end of the year brought about the beginning of a crash however, and that crash continued into and, for the most part, throughout 2018. However, even as cryptos fell to dramatically lower levels, they seemed to hit a surprisingly stable floor. That’s not to say they can’t drop lower, but it seems that it would take something fairly dramatic for this to happen.
But what, one might ask, is the actual reason for this floor? That is, what’s keeping cryptocurrency prices above water even as most of the stories and trends surrounding them have been negative? Any full, comprehensive answer to this question would be very difficult to come to, and might fill books’ worth of data points. On the surface though, some of the following factors appear to have an impact.
The Promise Of Investment
Whether or not it’s accurate, there are still a lot of so-called experts and analysts who are predicting big things in the future for bitcoin and other cryptocurrencies. On the higher end, you’ll still find ideas as dramatic as bitcoin being worth more than $100,000 by the end of 2019! Now again, these predictions can be wrong, and in fact most of them are, one way or the other. But the mere fact that the people out there making predictions haven’t entirely given up on cryptocurrency yet is perhaps most responsible for the relatively firm base cryptos seem to be able to maintain. That base is undoubtedly made up of people who are holding on partly in case prices start to skyrocket again.
Whale Holdings
This is essentially a higher degree of the idea just discussed. But it should be factored in that many of the bitcoin and crypto “whales” – those with massive holdings worth millions and potentially billions of dollars – are sitting tight in some cases. Some believe that whales account for almost 50 percent of high-end cryptocurrency holdings, so a lot of the value that’s still there is thanks to their having hung onto what they have.
Budding Utility
Cryptocurrency gets criticized by many for failing to live up to its promise of shoving aside ordinary monetary systems to create a new financial world order. However, too many are too quick to say that it’s useless. The fact of the matter is that cryptocurrency is gaining utility in multiple industries. It’s used commonly in travel booking now, as well as for the purchase of electronics at various online sites. There are multiple ways to use cryptocurrency in online gambling and gaming, and in some cases massive retailers like Overstock will even accept it. Cryptocurrency is slowly but steadily becoming more useful, which gives people incentive to buy and trade it, and helps the cryptos retain some value.
Usage Around The World
Just as cryptocurrencies are being used in more businesses, they’re also being accepted in more countries. Acceptance is a fairly fluid term in this context, but several countries have been friendly to cryptos insofar as they have allowed them to operate legally without doing anything to dissuade citizens from using them. This only helps the market, and helps cryptocurrency usage around the world to increase, even if very slowly. Each new country that gives cryptos the okay effectively adds a little bit of business to the market, so while this isn’t a specific or targeted factor, it does have an impact.
These considerations together, among others, may ultimately be responsible for keeping the prolonged cryptocurrency crash within a certain boundary.
