However, this initial enthusiasm has given way to a low demand for these currencies due to the climate of uncertainty that has caused the crypto-crash (bankruptcy) of large exchanges, putting the confidence of a sector in check that, although it has not stopped growing up, it is not fully understood by a large number of people either.
Despite this, we can ensure that these collapses are “normal cases” within the digital financial world, as has happened with different companies throughout history. Therefore, the current challenge is to face this situation to avoid further damage to the ecosystem.
A developing ecosystem
Despite having great attractions for investors, such as their ability to operate in a secure, decentralized and deregulated manner (even at an institutional level), or being an effective tool against inflation due to their exceptional revaluation percentages, cryptocurrencies they have an arduous road ahead to optimize the functioning of the sector.
In the first instance, the extreme volatility that characterizes them, with records of increases and decreases of over 90%, is added to the fact that their digital and unregulated nature has placed them, in certain cases, at the center of the target of cyberattacks, causing thereby significant losses for its investors, who are popularly known as traders.
Likewise, the constant struggle that they maintain with governments and centralized institutions, which push for the creation of a regulatory framework to regulate the behavior of companies associated with this ecosystem, will continue to dominate the narrative in the coming months, topping the news headlines around the market.
On the other hand, cryptocurrencies are not yet recognized as a universal payment method, so their use is limited to certain roles.
However, and despite the fact that these important areas of opportunity are essential to improve investor confidence and expedite their exit from this crypto winter, the historical behavior of digital currencies has proven to be upward, so their detractors have the ability to to be used as tools to promote market development, echoing its strength and resilience, which has been proven to be greater than other traditional sectors.
Diversify to grow
A fundamental pillar to accelerate the exit from this crisis is to promote an increase in the demand for cryptocurrencies. However, unlike previous periods of uncertainty where they had proven their attractiveness as investment tools, they are currently going through a moment of doubt.