London, England, 4 July 2021, ZEX PR – The crypto market has been spiralling in and out of control for nearly 2 months now. Crypto is one of the most sought-after assets in the market today and yet it is still unable to survive for long in the mainstream marketplace. This doesn’t mean that no cryptocurrency has become mainstream. Bitcoin and ethereum for one have been integrated into many regions around the world and are actively used as currencies by many international companies for verification of payments. Their mining systems are also quite expansive as compared to other cryptos and yet they still have trouble keeping their value stable for long periods.
The problem isn’t the demand or refusal of the use of these cryptos. The Investment Center broker, Nick Bauer, says that the real issue is public perception and market trends that decide the fate of any currency, be it digital or conventional. Cryptocurrencies remain one of the fastest-growing assets in the international market with their user bases increasing at an exponential rate.
Bitcoin alone has seen an uptick in its use for the past 6 months even though it has constantly struggled to keep its market cap stable. The same can be seen happening to ethereum and dogecoin. Practically every cryptocurrency that has entered the mainstream market is having a hard time maintaining its market cap and the number of users has increased over the past 6 months. Even though more and more companies from multiple industries have entered the crypto infrastructure and actively support it, it seems like the market is unwilling to go with company perception and stick to investor perception which is greatly influenced by social media
Cryptocurrencies And Market Perception
To understand why crypto is struggling to keep its market cap stable, you first need to understand its operating policy. It’s sort of an unofficial business model that explains how Cryptocurrencies are vulnerable to more varying factors as compared to conventional currencies.
Conventional currencies depend on governmental support which offers a sort of guarantee for investors about profitable returns. However, in the case of crypto which is a decentralised currency, governmental support is counterintuitive to its business model. However, governmental support is also the thing that can help it grow in an open marketplace. The only other alternative left for the crypto industry is to seek corporate support such that multiple international corporations allow its use for their products.
After nearly 12 years of continuous will do or won’t dos, the first sign of a multi-national corporation allowing the use of Bitcoin came into effect with Tesla Inc. The company had allowed customers to purchase their EVs from them using Bitcoin which is what essentially lifted crypto up.
For a few weeks, crypto saw its prices skyrocket to up to nearly $60,000 which was a new record in itself. For a while, it seemed that crypto had finally become stable and it was all uphill from that point on.
Social Media and Crypto
What came as a bombshell was a tweet from Tesla’s CEO Elon Musk tweeting out that Tesla would halt its use of Cryptocurrencies for payment for its products until Bitcoin transferred to a completely green business model even though steps had already been taken for this initiative and only a relatively small portion of the currency was mined using non-renewable energy resources. Nonetheless, this came as a blow to currency since it relied on industry support for its anchor to mainstream markets and opting for government support would go against the entire decentralised model the cryptocurrency is promoting.
The Current Situation
If you’ve invested in Crypto, then you’d know that it’s pretty much a rollercoaster ride that doesn’t seem to end. The one patch of smooth growth was undercut by a tweet and nothings been the same ever since. Even though Musk has tweeted that Tesla would soon allow Bitcoin to be used for buying products from the company. This is if the company finds that Bitcoin has shifted to a significant level of operating on green energy.
One would be correct to assume that this might indicate a return for the cryptocurrency markets but things seem to have worsened. Bitcoin is currently hovering around $30,000 which is half the valuation as compared to a few months back. So what happened? Why isn’t the crypto market recovering as it did before?
It all comes down to market perception and the effects of social media. Until more companies actively come out to support cryptocurrencies, it is unlikely that the market trend will shift to a positive note. Even now, many investors fear the repercussions of investing in crypto because of the unreliable support of companies and social media figures like Tesla and its CEO.
What Will It Take for Crypto To Make A Glorious Return?
Analyst says it is unlikely that a single company like Tesla will be able to bring crypto back from the death bed this time. It will take a lot more than a few multinational companies to offer their customers an option to use crypto as a form of payment if there is any chance of crypto returning to normalcy. Only time will tell whether Crypto will rise again on its own or will it take a lot more support to breathe life into the industry.
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