Jan Granroth: This is what it takes for bitcoin to reach $20 000 again

jan granroth this is what it takes to reach $20k again.

Image source: Shutterstock / Trijo News

Jan Granroth

jan.granroth@trijo.co

OPINION. Probably nobody has managed to miss out on the recent negative atmosphere on the cryptomarkets, and many, with good cause, might feel somewhat disillusioned. At the same time, the crypto industry time after another keeps committing fundamental mistakes, which makes the whole industry look bad.

A good indicator of the interest for bitcoin is the amount of Google searches on the word. This, together with the falling trading volumes, shows a clear negative trend.

Lately, bad news have been never-ending, even though these most often get rejected as “FUD” (fear, uncertainty, and doubt), an expression referring to unjustified news with the purpose to smear cryptocurrencies. The truth is, however, that many of them are caused by immaturity and recklessness in the industry.

Problematic ICOs

The largest ICO in the world, the one for eos, has recently been concluded with around $4 billion collected. With such vast amounts in play, it might seem reasonable to expect a working and a well thought through product.

But this is not the case in the world of crypto, and the eos platform, which is supposed to be run decentrally by the stakeholders themselves, experienced problems from start with users witnessing of both technical problems and a lack of knowledge and safety.

Also, the ICO of the platform Tezos has experienced trouble. First, they gladly accepted over $232 million, only to make a surprise announcement this Sunday stating that all investors need to go through KYC (know your customer) and AML (anti-money laundering) procedures.

Despite possibly serving a good purpose, arbitrarily changing the conditions at their own discretion hardly creates trust among investors.

This, together with the fact that the Tezos documentation states that all investments in fact are considered donations, as well as the unclear statements regarding what happens in case someone refuses to or is not able to perform the checks, increase the uncertainty even more.

Similar wordings are found in the documentation of tether, which states that the currency is redeemable for dollars, only to in another section inform that they, however, have no obligations to do so.

“The industry needs regulation”

It stands clear that the industry needs regulation, if not in the form of state regulation, by self-regulation similar to the derivatives markets. Despite good intentions, it is not reasonable that more or less obscure companies, at their own discretion, get to manage funds totally without transparency nor supervision. Sadly, they have proven this on multiple occasions.

Should state regulations be set in place, one hopes that they are based on justified causes, as opposed to the completely arbitrary approach by Indian authorities.

This is needed for new all-time highs

In order to reach new all-time highs, new money is needed. It’s plausible to think that this may come primarily from businesses and institutional investors, but that requires a well functioning system. The recent rush revealed major shortcomings, both in the blockchain technology as well as in the related businesses, such as exchanges that continuously collapsed due to the pressure.

Nevertheless, one should not forget that the crypto industry is very active, regardless of current price levels, and for building a stable infrastructure, the lack of hysteria such as the one during the winter is a blessing.

Should, on the contrary, the next rush reveal the same immaturity in the industry and technical restraints as the preceding one, it will take immensely long to re-build confidence among people. This could result in the crypto world (to remain) being a mutual admiration society.

Jan Granroth,
Reporter at Trijo News

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