Basically every cryptocurrency has been down in value for a while now – the crypto crash, they’re calling it. It all started a few months back, for a variety of reasons. Part of it is the same set of conditions that have affected stocks and economies generally: the war in Ukraine, worries about inflation and higher interest rates. These global issues also hit cryptocurrencies – they are part of the economy, after all – but then things got worse.
In May, Terra, whose native coin is LUNA, completely imploded, going from a value of £62.78 per coin on 7th May to £0.000014 less than a week later. Yeesh. This made some people very, very worried about crypto – billions were lost for some investors, many of whom would have previously been very confident in blockchain. Then, in June 2022, Celsius Network, one of the bigger cryptocurrency lending companies, started freezing withdrawals and things. This again fuelled scepticism and a lot of people rushed to pull their money out of crypto, in turn bringing the market down again.
There’s small signs of it picking up again, though. Right now, for instance, Bitcoin is down, but the value of other coins, such as Ethereum, is creeping up again. Crypto is known for boom and bust cycles: trends go up, new businesses get people excited again and investors get on board because this crypto shit looks like it could help people retire at, like, 21.
And while this might offer little hope in the midst of a lot of gloom, it seems that the general appetite for crypto is still there. New cryptos launch daily, people who made profit before the crash are starting companies and even football teams are still getting involved (Man City launched a partnership with OKX recently, which will be on the shirts next season). There’s also advancements within technology like NFTs and NFT marketplaces, and that mind boggling thing called the metaverse.
But will we ever see cryptocurrencies match their all-time highs again? Well, if we could predict the ebbs and flows of crypto, we wouldn’t be writing this and you probably wouldn’t be reading it. We’d all be living it up, drinking oxygen in Bali or whatever rich people do with their money. So obviously, take predictions with a pinch of salt and don’t let them influence you into buying or selling (or not buying or not selling) anything crypto-ish. That all being said, let’s dig in a bit.
CNBC recently reported that a “top crypto-exchange founder” has predicted that Bitcoin won’t have another bull run (AKA be an asset that gets you returns, read more about that here) until 2024. Think that means it will recover in 2024, and you can just hang back and buy the dip until then? I hear you. But like, maybe, maybe not.
At the time of writing, one Bitcoin is worth £17,653.30, according to Coindesk. But the market could continue to crash and a Bitcoin could be worth a tenner in 2023. That means 2024’s big bull run might only amount to £1000. If you have Bitcoin now, you’ll be hoping that this doesn’t happen. But it could. On the other hand, we could see Bitcoin stay around its current price until 2023 and then have a bull run that gets its value back to (and maybe even beyond) its all-time high of £58,291.10. No one really knows. Plus, experts’ predictions are often (read: almost always) incorrect.
Bitcoin is the major player in crypto right now, but it’s not the be all and end all. Other coins like Ethereum offer a larger variety of purposes and are looking into ways to have a smaller carbon footprint, which could mean it’s their time to shine. Ethereum 2.0 is meant to launch this year, for example, and many experts say this will cause an Ethereum bull-run. Of course, there’s new government regulation coming in constantly that could halt this hype, and crypto at large. But, say a bunch of these altcoins go on bull runs before 2024, that would mean crypto could recover generally, while Bitcoin (or any other coin) could get left behind.
This all goes to show that bear runs and bull runs are relative and there are many variables. Also, “crypto recovery” might mean different things to different people. For some, recovery might look like somewhere between where we are now and the all-time highs; for others, it might mean making everyone a load of money day by day, constantly smashing those all-time highs. The latter isn’t impossible, but there’s always going to be dips. And as we’re learning now, sometimes they’ll be prolonged.
So if you’re riding the crypto wave, make sure you’re strapped in tight. Running with bulls and bears is never going to be an easy ride. Even though it still seems like there’s growing demand and exposure, there’s still loads of risks involved. Never invest what you can’t afford to lose.