Is Crypto Dead? Here’s Why You Shouldn’t Be Worried

Whenever you look online, you can find supposed experts claiming the cryptocurrency market is on its way to zero, but is crypto really dead?

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Key Takeaways:

• Bitcoin drives the crypto market. If BTC experiences a significant price movement, the market will usually follow.
• Bitcoin recently set a new all-time high of $73,737, indicating that crypto will perform well in 2024.
• The crypto market works in four-year cycles, including a bear and bull market. 
• On average, investors purchased Bitcoin for $45,500, meaning they are 42.35% in profit. 
• The Bitcoin halving effects are yet to be fully realized.
• BTC ETF continue to buy BTC.

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Crypto is Not Dead: Here's Why

Cryptocurrency is not dead or close to dying. The market suffered heavily in 2022, with Bitcoin (BTC) trading as low as $15,479, leading many investors to exit and proclaim cryptocurrency dead. 

However, cryptocurrency rebounded strongly in 2023, reclaiming $23,500 in January, then $30,000 in April, and settling around $45,000 in December. People who purchased BTC in December 2022 would've enjoyed over 170% profit within twelve months, indicating that crypto is alive and kicking. 

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So far, 2024 has been even more exciting. Bitcoin surged to above $70,000 by March, hitting a new all-time high of $73,737. Moreover, the Bitcoin halving took place in April, and historically, the price of BTC increased substantially around a year after the event, meaning we could still see a massive move upward from BTC within the coming months. 

According to an analysis from Ki Young Ju, the average entry point for Bitcoin traders is around $45,500, meaning that many people currently sit at around 42.35% profit. With the market growing sharply over the past year and a half, making a new all-time high, and possibly gearing up for a post-halving run, crypto is far from dead. 

Instead of being swayed by people claiming that cryptocurrency is dead, it's helpful to understand that the market works in roughly four-year cycles. Initially, prices are low, and there's little interest in the market. Then, purchase volume increases sharply, and prices rocket upward (the bull market). Next, early buyers become sellers, taking profit, and finally, supply outpaces demand, leading to price crashes (the bear market).

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Metrics To Gauge Crypto Market Activity 

If you still need convincing that the crypto market is alive and active, there are several metrics you can analyze to make an informed decision. Ideally, you should utilize a combination of off and on-chain metrics when analyzing the crypto market's performance. Together, the metrics paint a more accurate picture than using one or the other singly. 

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On-Chain Data 

The blockchain is an immutable ledger of trading activity, making it invaluable for determining whether crypto is dead. You should consider metrics like daily active users, active wallet addresses, transaction volume, and development activity. As data is usually chain-dependent, it helps to review the statistics of multiple networks to get a fairer idea of activity. 

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Off-Chain Catalysts

Off-chain events are just as crucial for determining how crypto is faring. Factors like institutional demand, Bitcoin Exchange Traded Fund (ETF) inflows, regulatory changes, and technological advancements play a massive part in cryptocurrency's lifecycle. You can also look at the wider economy to paint a broader picture of crypto and other investments' performance. 

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ETFs

Lastly, the new US based BTC ETF have been seen record breaking flows. Albeit recently flows have slowed down, the general trend flows are on average still seeing positive numbers. On a long term bases this is set to reduce the supply of available BTC on the open market.

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The Future of Cryptocurrency

Cryptocurrency is in an exciting place. Bitcoin is currently driving the market, has reached an all-time high, and is gathering strength ahead of another upward move. With the Bitcoin halving's effects slowly being felt in the market and institutions beginning to add crypto assets to their portfolio, cryptocurrency will likely continue to survive and thrive in the foreseeable future. 

However, crypto still has many hurdles to overcome before the technology can enjoy mainstream adoption, including: 

• Interoperability - Cryptocurrencies cannot communicate between networks, fragmenting the entire ecosystem. Interoperability must be solved as it will drastically reduce crypto's technological barrier. 
• Regulatory Issues - Cryptocurrency regulations are uncertain and subject to constant change. Before crypto can enjoy mainstream adoption, it must receive regulatory clarity. 

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We aim to publish factual and accurate information as of the publication date. For specific information about a cryptocurrency exchange or trading platform please visit that provider's website. This information is general in nature and is for educational purposes only. We do not provide financial advice, nor does it take into account your personal financial situation. We encourage you to seek financial advice from an independent financial advisor where appropriate and make your own inquiries.

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