The Investment Center Reports – Why The Recent Crypto Crash Is Irrelevant?

London, England, 2 June 2021, ZEXPRWIRE, Cryptocurrencies are one of the most popular tradable assets in the financial marketplace. They are relatively new and only a few cryptocurrencies are part of the mainstream financial system. The only issue with Crypto is that it is an asset that has yet to establish a strong footing in the economic system. Many new assets have trouble adjusting to the rigorous financial marketplace given the intense competition. New assets can be influenced by social changes by a higher percentage as compared to normal assets. This has more to do with investor confidence in the product which is why crypto crashed this time.

Crypto has been widely used by major companies in the past few months, it is still in its early stages. It reached its peak when Tesla announced its decision to allow Bitcoins for transactions related to its products including its automobile line-up. It crashed as a result of Tesla’s CEO tweeting about the reliance of Bitcoin on non-renewable resources which has been debunked. Still, cryptos such as Bitcoin lost almost half of their value when it went down to $30,000. It has somewhat recovered since then and is currently standing at about $38,000.

The Investment Center broker Nick Bauer analyses the market and tries to figure out why after all of these crashes investors should continue their support of a flawed asset that has seen 2 crashes in its decade long existence.

Well, the thing is, early investors really didn’t fund Bitcoin as a new form of currency rather they treated it as a revolutionary product of the primary system that it was designed to operate. This system is known as Blockchain.

The BlockChain Revolution

When Satoshi Nakamoto released the coding infrastructure for Blockchain nearly a decade ago, his vision wasn’t to create a currency that can be exploited. His vision was mostly related to the development of the encryption-based technology of Blockchain. If you don’t know what Blockchain is then here is a brief description. Blockchain is a new concept that uses decentralised storage systems to secure independent transactions. This allows for a higher level of encryption that is not available in other types of finance systems.

Blockchain was designed to replace the current banking system that charged an exorbitant amount of fees and was vulnerable to hacks. Blockchain, however, did not store all of its data in a single central system like banks instead opted for multiple nodes spread out across its infrastructure. This way even if by some miracle a hacker was able to get through the encryption protocol of a single node, they would only have minimum access to less than 1 per cent of the total funds stored on the system.

Back in 2009, investors chose to back the system only because of its potential of introducing the next generation of transaction systems. The idea went mainstream in 2017 and even though it crashed a little after that, it did start the conversation of implementing a new transaction system within the financial marketplace.

The formation of cryptocurrencies and their worth is a benefit but it wasn’t the central purpose of Blockchain. Blockchain was designed to offer a secure form of exchanging funds without involving any third party. Even though Crypto crashed this past week, it does not mean that blockchain failed in its purpose. In its entire history of operation, Blockchain has never once faulted as a direct result of its infrastructure. The only cases where there have been reports of some cryptocurrencies being stolen, mostly had the account holder sharing their digital wallet keys with someone else. Human error was to blame in most of these situations.

What is to become of crypto?

There have been talks among crypto fanatics about how they feel betrayed about losing money in these past few weeks but blockchain was never meant to be a get rich quick scheme. It was designed to replace the existing banking system that exploited its users, and offer the general consumers a chance to access another transaction system that would be secure and would not involve any other third party.

Success or Failure

At the end of the day, the value of crypto matters since a transaction system is useless if it cannot support itself in the long run. Analysts like Bauer do predict that Bitcoin and other cryptocurrencies that crashed will eventually regain their position but for now, the success of Blockchain technology is what matters most.

Closing Argument

Blockchain has proven that it is a viable replacement. While the current assets using this new technology have yet to stabilize in the financial markets, it does not mean that investors should give up on Bitcoin and other cryptocurrencies. This is because the asset you’re investing in is the underlying technology and the support system surrounding that cryptocurrency and right now Bitcoin and Ethereum have the backing of industries that actively allow it to be used for transactions. Bitcoin has already regained some of its lost ground since it is currently standing at $38,000 further proving that the marketplace has not given up on Crypto.

Disclaimer: Our content is intended to be used for informational purposes only.

It is very important to do your own research before making any investment based on your own personal circumstances.

You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.

Source: Bitteks