During the great cryptocurrency boom, which means the end of 2017 through the beginning of 2018, every major publication was writing about it almost daily. They were reporting current news and predictions, both extremely optimistic. The underlying message was that cryptocurrency definitely is the “next big thing” and that jumping onto that train right now is the best investment ever.
And yet, not even two full years after that great uplift, crypto is all but forgotten by those same major publications. Of course, there are still many dedicated sources that report news from the world of crypto every day. There are also occasional mentions of the topic in sources like The New York Times or Wired. However, those are often pessimistic and negative pieces.
The important question is “why is this happening?” Is crypto really dying? Were all those positive predictions wrong?
As it often is, the answer is extremely complicated. Also, some of the reasons have little to do with the actual value of cryptocurrencies and blockchain technology.
It is a common belief that crypto has fallen out of favor so fast because it’s extremely volatile. Therefore, trading in bitcoin and other altcoins is too risky for any sane investor. However, it’s a given that FX forecasts are a part of any economy magazine. Some of the fiat currencies used by FX traders also are exceptionally volatile. But that doesn’t stop people from using them for trading, occasionally losing hefty sums of money or even going bankrupt over a particularly bad deal.
Why is crypto any different?
Why Is Everyone Quiet About Cryptocurrency? Enter Politics
There is a political implication to everything these days, even a badly thought-out tweet. Considering the potential world-changing magnitude of it, cryptocurrency is all tied up in politics. And it’s not a good place to be if you are an unregulated and decentralized type of currency.
On one hand, crypto has the power to revolutionize the world in many ways. Making international money transfers more secure, fast, and affordable. This can be a huge help to many developing economies, where remittances are a big part of the GDP. Businesses would benefit from this as well, especially small ones that are currently unable to go global because of the prohibitively high costs of international money transfers. The same goes for investors.
However, in the eye of politicians, all those benefits are heavily outweighed by the lack of regulation. Not any one country can actually control crypto and even monitor it efficiently. Therefore, this type of currency leaves a lot of room for tax evaders and other people who want to use the system to their benefit.
Admittedly, those concerns are well-grounded, so it’s not about greedy politicians banning something that they cannot tax or control. Regulation of currency on the state level is necessary for the country’s economic stability. In fact, you can see it by watching the aforementioned FX forecasts. Currencies that are the most stable are those from industrialized nations.
They are relatively stable because they each have some type of protection coming from strong national banks. Those banks literally control the supply of money in response to various financial and economic fluctuations. It’s this action that keeps those currencies from being extremely volatile. Unprotected currencies do not have4 it. Therefore, they are nearly as bad as crypto in volatility.
But getting back on track, top publications might not be speaking about cryptocurrency anymore because they are most often closely connected to governments. Therefore, if politicians are very much against the spreading of crypto, those publications won’t endorse it openly. They might not criticize it either, but the point is that such sources can’t really afford to go against mainstream political opinions.
Other Reasons Why Crypto Is Falling and Failing Today
If you visit the Deadcoins website, you might be astounded by the number of cryptocurrencies that failed utterly. That number is growing and it will keep doing so. Quite possibly, if nothing major changes to take crypto closer to the level of fiat currencies, all coins will end up on that failures list.
The rapid fall of altcoins is, no doubt, another major reason why top media outlets reduced the number of publications about them. And the reasons they are failing aren’t all politically-motivated. Many of them just expose the weaknesses of cryptocurrency in general.
The most important of those reasons are:
- Crypto isn’t an asset and
therefore doesn’t generate revenue.
in fact, people mass-investing in crypto to speculate on its raising value are a big part of the reason why it failed. Cryptocurrency is a currency! To keep its value, it has to be used as a currency. However, people treated it like an appreciating asset. The result is that it failed to live up to their misguided expectations.
- Crypto isn’t a
Similar to the one above, investing in crypto makes no sense if you want to make it an actual investment that will work for you in the future. Commodities have a stock that gets consumed and generates a demand. There’s no demand for crypto because it has practically no value even as a currency. It’s only accepted by few retailers and even fewer people actually have access to it.
- Crypto doesn’t store value.
You can’t even buy crypto and just hold on to it to sell it for the same price you bought it if you’re ever in a pinch. With its volatility, you are most likely to lose a huge part of the invested money (if not all of it).
Take a look at those reasons again and you’ll see that the biggest problem for cryptocurrency today is that it’s not actually used as a currency. Partially, that’s because no government will actually provide it with the necessary legal status. It’s not illegal to buy or even trade in crypto in the majority of states. However, you can’t use your coins to pay utility bills or taxes or any other important payments. Even with merchants, only a few would accept this currency.
The other part of the reason is that during the big boom for crypto, people bought it to speculate on its rapid rise in value. Some actually managed to become millionaires during that time. However, a currency that isn’t used will always lose value. Therefore, unless something big changes, it’s not only top publications that will forget about crypto.