Bull markets are full of crypto optimism and wild price predictions for Bitcoin and its brethren. However, the opposite happens in a bear market, with doomsayers often claiming that BTC prices could go to zero. But how likely is this to happen? Let’s discover more about these scenarios.
Can Cryptocurrencies Die?
Co-founder of Magik Invest and creator of 0x Illuminati, Shiv Sakhuja, shared his thoughts on June 20th. He stated that he believes crypto and can create very important financial products over the next decade. Furthermore, this will provide better financial access to people worldwide.
Is crypto going to 0?
Let's explore what could kill crypto.
?? ?? [1/x] pic.twitter.com/AO3QIeZzb3
— shivsak (@shivsakhuja) June 21, 2022
However, that thesis could be invalidated if no new products were developed. It could also be that governments ban crypto outright, and the macroeconomic climate slips into a prolonged recession.
Also, it’s important to say that governments cannot ban crypto because of its censorship-resistant feature. However, they can ban fiat on and off-ramps. “99% of people will not want to own crypto if it is illegal and not convertible for fiat,” stated Sakhuja.
Countries such as the United States have a significant influence over crypto. However, they have no intention of banning it at the moment, just regulating it. China banned crypto, yet trading still thrives, and markets have made new highs.
Signs of Crypto Crisis?
A major failure in the Ethereum Merge could crash markets even further, he said. However, this is unlikely since testing is going well.
Two massive failures of #ethereum have caused contagion in the entire market:
Locked staking requiring custodianship.
Failure to launch the merge on time.
The team at deposited @LidoFinance + 2.0 deposit contract on the promise of the merge being “soon”.
— ADAape ?? "APE" (Single Pool) (@TheADAApe) June 14, 2022
Moreover, a massive stablecoin collapse could also spell the end for crypto markets. A collapse in either USDT or USDC could cause a domino effect to wipe out a lot of value quickly. “The world will also lose trust in crypto if this happens, and it will be tough to recover from this,” he added.
Other scenarios such as projects and coins no longer capturing value could also affect markets. Additionally, most people invest in crypto because they believe in the project and its long-term goals.
Global Recession Looming
A prolonged global recession is probably the biggest threat to the industry. Furthermore, previous market cycles have not had such gloomy economic clouds over them. In the space of a couple of years, there has been a pandemic, war, and energy and cost of living crisis. Many economists think that this is inevitable now.
Global recession is coming. The boom in manufacturing sentiment indicators in the US has now fully reversed & we're about to go into recession territory. So we're now tracking a manufacturing recession on top of the US housing recession that's already been playing out… pic.twitter.com/wHbiZhP4Qc
— Robin Brooks (@RobinBrooksIIF) June 17, 2022
Ultimately, however, the end of the internet is the only real thing that could kill cryptocurrencies, which is highly unlikely.
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