The era of blockchain and cryptocurrency have for long been likened to the advent of the internet; now market indicators reveal that the latest bear run in crypto markets have surpassed the loss of the dot-com crash.
Crypto markets suffer 80% decline
Recent data from MVIS CryptoCompare Digital Assets 10 Index puts the market decline from December’s highs at 80. This makes the 78% peak-to-trough decline of the dot-com crash by Nasdaq Composite Index look better.
Similarities Between the dot-com and Crypto Eras
The dot-com era was characterized by huge investments in internet companies by investors who didn’t want to miss out on the new technology. FOMO—Fear of Missing Out—caused many investors to bet big on companies and solutions that were not yet proven. The result, a historic crash popularly called the ‘dot-com bubble’.
Replace dot-com with blockchain or crypto and you get a story similar to 2017.
Just like in the 2000s when several internet companies sprang out to solve almost every problem in every industry, blockchain and distributed ledger technologies (DLTs) are being touted as the panacea for most industries.
Does this confirm Crypto is a bubble?
The premise in most cases has been that cryptocurrencies don’t have intrinsic value and that its markets are unsustainable pyramid schemes.
What’s different, however, is that the crypto market has suffered similar crashes in the past and recovered to reach even greater highs.
A Long-term Approach is Needed
According to a report on Bloomberg, crypto proponents point to the Nasdaq’s recovery 15 years later, and to the lasting benefits of the internet, when confronted with these negative comparisons.
This follows the fact that many leaders in the crypto and blockchain space advocate for a long-term approach towards cryptocurrency. While the buzz and hype may have brought huge attention to the crypto space, many believe that the crypto space will be better served if it was easier to access and utilize cryptocurrencies in day-to-day activities.
Just like the internet, the mainstream adoption of cryptocurrency will bring huge returns for the industry.