It’s been one of the bloodiest days in the history of cryptocurrencies.
Altcoins in particular have taken a hammering. Litecoin is down more than 10%, Australia’s PowerLedger is down around 20% and even Ethereum is down around 15%.
So what does this mean for the future of the emerging “asset class?”
Well, as always, ‘Crypto Twitter’ is having a lot to say.
Here in Australia, Alex Saunders from crypto community ‘Nugget’s News’ has flagged a potential “relief rally.”
American digital asset strategist Meltem Demirors has told CNBC that, as with early internet stocks, real traction will come in time.
“New technologies that shift the paradigm take a long time to really understand,” Ms Demirors said.
There’s talk of the “depression” phase ending… and the “acceptance” phase beginning.
So much pain…
Meltem Demirors says the “narrative” around bitcoin is still “really hard to grasp,”
“Really the only metric we have for most cryptocurrencies is the price, and price is such an imperfect metric,” she told CNBC.
“What does actual utilization look like? That’s really the struggle for crypto right now.”
Demirors said investors should ignore the price and think of cryptocurrency as an early internet stock, such as Microsoft or Amazon.
Those stocks have turned into incredibly sound investments, but it took years for them to recover from initial highs after the “dotcom bubble” burst.
“What we saw in crypto was this massive run-up, where everyone got ‘FOMO,’ or fear of missing out, as we like to say. What it caused is a speculative bubble,” she said.
But Demirors said capital is now starting to get deployed into “building real businesses that serve a real purpose.”
“We are starting to see real traction. A lot of it is really dependent on finding those data points, those metrics, that are going to drive that growth story.”