The cryptocurrency bubble refers to the skeptical view when the crypto price rises, representing a speculative bubble. An asset bubble generally occurs when the price of an asset is much higher than its intrinsic value.
Are we really in a crypto bubble? Will the bubble burst any soon? Let’s have a closer look.
The term bubble has been associated with anything and everything, including stocks, equities, real estate, to name a few.
Crypto is in what we call a fast adoption stage. Crypto has created life-changing situations for investors who got in early. So are we too late? Well, the crypto experts don’t think so.
Crypto fever spread during the pandemic
When the coronavirus hit the street and the people couldn’t, ideally, the people had nothing to do other than bingeing and gossiping. That’s when the crypto fever hit.
Digital assets like bitcoin and ethereum, the largest crypto by market value had astonishing growth since 2019. This gave people speculation that we are in a crypto bubble.
People started accumulating crypto during the pandemic. Some jumped on the bandwagon without having a clear idea about how crypto works. Others took their time to educate themselves and research; they got lucky.
Many people hopped on the crypto journey because it is decentralized, and users can trade it from any part of the world. To be precise, the global adoption of crypto is slowly and steadily growing.
Large-scale institutions and nations hop on the bandwagon in fear of missing out. FOMO has driven market conditions and has caused prices to soar higher.
On one side, a group of speculative-minded people thinks crypto is just a bubble, and those who poured their money into it will eventually lose it. At the same time, there is another class of people who firmly believe in its true underlying technology.
But one thing that is rest assured is that cryptocurrencies have made people transform their thoughts about money.
Soaring valuations for crypto startups
Let’s take a step back and appreciate the young entrepreneurs coding their brains out to generate notable startups. From the time when startups were stumbling to raise a few million, we see startups that cash in a hundred million quickly.
Some notable and eye-opening startup valuations include:
- Bored Ape Yacht Club Now Valued at $4B After Funding Round.
- Luna Foundation Guard Has Raised $2.2 Billion for Terra Stablecoin UST’s $BTC Reserves.
- Former a16z General Partner Raises $1.5 Billion to Invest in Crypto and Web3.
- LayerZero Raised $135M In Investment From Sequoia, FTX Ventures, And A16z.
- OpenSea Investor GCC Raises $110 Million.
- Composable Finance Raises $32 Million in Series A.
The startups mentioned above are arguably nitpicked to lay down an idea of the wealth generated in the crypto industry. Most startups, including the BAYC, which started a year back, are now valued at billions.
With the soaring interest in NFT and Metaverse, people buy digital arts and virtual real estate. While some think that metaverse is the future, others believe it is idiotic to buy a piece of virtual land and a monkey picture for hundreds of thousands of dollars.
Experts think 2022 will be the most happening year for crypto and that the asset class is never going away. A group of non-believers tries to stay away as crypto is indeed volatile.
But those who enter with the right mind and long-term thought will be rewarded. All you need is utmost faith in the technology.