It's been a very volatile couple of months, even by the standards of crypto. Looking at the entire market cap, there was a huge rise in December and a similarly huge dip in Jan. Obviously a big dip is to be expected following a sudden rise, but I think there is a reason that this one stands out.
The slew of media articles was I think the principal driver for the rise, and the mainstream nature of the coverage caused new 'mainstream' people to invest in bitcoin and alts. Crypto is headed inexorably towards the mainstream, and with each step that it takes it will attract a greater percentage of people who know nothing about the tech and maybe have not even heard of the word 'blockchain'. This absence of belief in the underlying tech and the transformative nature of blockchains and decentralisation causes them to be more skittish, and sell up at the first sign of a bear market. Essentially they are not buying into the ethos, but merely into a new asset class. This I think is why both the rise and the dip were so severe.
What I'm saying is that I think we could have more of the same. The closer we get to the mainstream, the more 'mainstream' the new people who buy in, and so the more volatile the markets. Yes, traders will exacerbate any situation by shorting, but this is a symptom not the cause.
Just an opinion, feel free to shoot me down - but I do believe that the path to the mainstream will become increasingly rocky. There is also the ongoing threat of new legislation, but agian I think this is symptom not cause. The cause is the new class of people entering the market.
(Apologies if this thread is in the wrong section, I wasn't sure where to put it.)
Topic: The path to mainstream adoption is rocky (Read 116 times)
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