As the most prominent cryptocurrency, Bitcoin has been a staple in the industry. Its adherents have always held strong even with massive highs and lows in the market. However, critics of the technology are beginning to wonder if Bitcoin is dead. We wager that the answer is a complicated form of “no”, but it’s definitely not smooth sailing.
Let’s examine the market with an even-handed perspective and glean what we can. No, this article isn’t meant to spread FUD, but rather look at the issues that need to be overcome. Moreover, the article is providing a “man on the street” view of Bitcoin’s place in the industry. While many crypto-enthusiasts handwave public perception, it’s important to know how crypto is viewed outside the bubble of investors.
Is Bitcoin Dead?
While Bitcoin has been declared dead multiple times over the years with no staying power, these prognostications haven’t been entirely unfounded. Even as the most famous cryptocurrency, it never found the foothold any standard currency would ordinarily need to be fully recognised as legal tender. Yet, the blockchain and its biggest fans are marching on.
Although, the market is not without its doomsayers. One of the most prominent voices declaring the death, not just of Bitcoin, but of cryptocurrency as a whole is Chamath Palihapitiya. Once a firm believer in the technology’s ability to supersede common currencies, he’s now waving the white flag. But is this a warranted approach?
As it stands, no: Bitcoin is not dead. Even though it hasn’t recaptured its highest value from last year, it has climbed in the past 6 months. Some are declaring a bull market as opposed to a collapse in price. There is an argument to be made that this might be a rising tide, but it’s too soon to rest the case.
Bitcoin Bull Market
There is reason to be hopeful about the market due to the recovery over the past 6 months. The market is far from cap-sized in the way detractors were anticipating. The price is still higher than it was 3 years ago and is more stable overall. However, that might be deceptive considering the changes we’re seeing in the macro-environment.
The bull market argument is one that is enticing to crypto-enthusiasts but it’s not a clear certainty yet. The boom in cryptocurrency as a whole has slowed significantly. Peripheral industries like NFTs have suffered declining interest as well, so Bitcoin’s remission in prices is in keeping with a wider industry deceleration. Bitcoin may not be on its deathbed, but its instability is making investors hesitant.
With different exchanges collapsing, confidence in crypto has also taken a hit and that is undeniable. Proceeding in the market will require more caution, especially considering reports last year showing that over half the daily reported Bitcoin trading volume is apparently fake Bitcoin transactions.
Aside from these issues, AI has taken up a lot of investment space and is edging out the crypto market. A lot of investors don’t care about crypto technology and are just chasing trends. Many of these investors appear to have jumped on the next bandwagon.
Bitcoin NFTs, DApps, & Dead Ventures
One of the reasons Bitcoin has not been growing at the expected rates proposed by its most zealous proponents is because of shifts in what is expected from Blockchain technologies. DApps and NFTs are prime examples of areas where Bitcoin lacks with respect to other tech. While it is possible to mint NFTs on the mainchain, it’s notably more difficult. Similarly, DApps are more complicated for this version of blockchain technology because smart contracts are difficult to implement on it.
With the fall of a few prominent exchanges like FTX, Bitcoin has suffered falls in value. Along with it, marketing for crypto has diminished significantly. This is an issue for the industry as it needs steady growth and more users to increase its usability in the wider world.
There are also all sorts of non-exchange companies that are making things worse, such as Bitcoin bonus. Needless to say, the Bitcoin bonus is not legit. While some Bitcoin bonuses pay off, a large percentage end up scamming users. Bitcoin bonus payouts have been fewer and far between and this affects the perception of Bitcoin as well.
An Industry in Crisis?
Things are changing within the industry as a whole. Investors are tired of the ground constantly shifting under their feet and are proposing legislative solutions.
The industry’s most ardent defenders who were once touting the immutable screed of decentralisation are now calling for a Bitcoin tax and deregulation standards to legitimize the whole market. This unorthodox shift is understandable once you analyze the instability the market brings with it left to its own devices. The chances of regulation and an industry-wide systemic restructuring are inevitable (or the industry will collapse). However, this doesn’t solve a prominent issue: industry perception.
Once the industry does undergo restructuring, the main hurdle Bitcoin will still face is one of marketing. Its utility has not been clarified and it has earned a perception of being a cesspool of rugpulls and shady practices. This issue will require remedying with better PR and digital promotion. Public trust, after all, can be fickle.
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