Despite almost completing another 4-year cycle, many cryptocurrencies have been hitting new all-time lows in recent days. If you have been invested and committed to this industry for several years, you are really starting to feel the pain now.

In this article, we are going to cover some factors causing the recent price declines in crypto, as well as what's in store for the long-run.

Bitcoin ETFs

Ever since Bitcoin ETFs were approved last year many investors have been skipping the crypto exchanges and buying Bitcoin "directly" through their bank or brokerage (truly owning bitcoin would require holding the private key).

Before ETFs, investors needed to open an account with an exchange like Coinbase or Binance to buy Bitcoin. When the price of Bitcoin increased, many traders would convert their Bitcoin into altcoins that had the potential for greater returns.

Now that a big portion of the Bitcoin supply is locked up into ETFs, investors don't have the ability to easily rotate into alts, suppressing the price of many cryptocurrencies.

Israel-Iran War

We cannot ignore the tense geopolitical situation unfolding in the Middle East right now.

Instead of being thought of as the future of money, cryptocurrencies are still perceived as "risk-on" assets. Therefore, their prices have been dropping as a confusing war between Iran and Israel intensifies.

By the way, in a previous article we wrote about how blockchains can be used to reduce the misinformation we see in today's wars.

Crypto vs. Fiat

Most crypto traders are still focused on increasing their fiat holdings, rather than replacing an unsustainable debt-based financial system with something more robust. This is the reality in a global economy that still operates on dollars, euros, and yen.

But as global debt continues to expand exponentially, and interest rates remain elevated to prevent inflation from running out of control, the future of the financial system comes more into question with each day that passes.

The ECB announced the testing phase of the digital Euro will finish by October of this year. Meanwhile, the Trump administration has been pushing a "real ID", a $500 billion AI initiative, and facial recognition technology at America's borders and airports.

These all appear to be steps towards a "Great Reset" and Agenda 2030 - a future where the government will have ever more control over our lives. How can we protect our freedoms? The promise of decentralized money remains alive and well.

Cryptocurrency exists outside of any national jurisdiction, preventing it from being controlled or shutdown. Some regions, like Wyoming and El Salvador, have taken a more positive stance towards it, while other jurisdictions have seen it as a threat to their power and tried to ban it.

Bitcoin vs. Alts

When it becomes obvious to the population that the financial system is actively being reset, the fiat currencies we still use today will quickly lose value relative to Bitcoin and other cryptocurrencies.

In today's fiat-based economy, Bitcoin acts as a store of value, protecting investors from inflation. But Bitcoin cannot power much economic activity, as it's limited to only 7 transactions per second. As token incentives start to stimulate more economic activity in the coming years, Bitcoin's dominance will drop.

For the time being though, some patience is required.

Until next time...

The traditional fiat system is on its last legs. The powers that be understand this, and that is why they have been working on a replacement. Much of the crypto community also understands this.

At the end of the day, it may require a collapse (or controlled implosion) of the fiat system, and the emergence of a crypto-based economy, for tokens with utility to start advancing on Bitcoin and memecoins.

If you learned something new from this article, be sure to check out my other posts on crypto and finance here on the Hive blockchain. You can also follow me on InLeo for more frequent updates.

Sources

Crashing Price Chart [1]