What’s the Buzz About Bitcoin Cryptocurrency and Blockchain Technology?

We know Elon Musk is a fan, but what is it about? And when will the Bitcoin bubble burst?

The cryptocurrency market, like the stock market, is often exposed to extreme price fluctuations – both upwards and downwards. Tesla, which recently bought $ 1.5 billion worth of Bitcoin, is just one example of how the crypto market can change.

For example, in late 2013 to early 2014, mid 2017 to mid 2018, and now again, as we’ve seen in recent months, there have been many ups and downs in cryptocurrencies.

If we analyze the movement of cryptocurrencies over a 52 week period, it is clear that the largest market cap is what we have seen in the past few weeks:

  • Bitcoin (# 1 cryptocurrency by market cap) has a 52-week low of $ 4106 and a 52-week high of $ 58,330 (a factor of 14.2).
  • Ethereum (# 2 by market cap) has a 52-week low of $ 95 and a 52-week high of $ 2,036 (a factor of 21.4 apart).
  • Cardano (# 3 by market cap) has a 52-week low of $ 0.01913 and a 52-week high of $ 1.48 (a factor of 77.4 apart).

(Data source: https://coinmarketcap.com, accessed March 2, 2021.)

This level of fluctuation within a year is seldom seen in the stock market, and it is generally not something that happens once to a particular cryptocurrency. It happens often and in multiple cryptocurrencies.

Understand the blockchain ecosystem

In the past few years, blockchain technology has advanced rapidly as more and more companies, researchers, and developers begin to adopt and understand it.

In the first generation of blockchain platforms, there were many limitations in terms of scalability, high energy consumption, limited support for smart contracts, etc.

Now hundreds of projects and platforms are trying to improve various aspects of blockchain technology, involving hundreds of highly skilled researchers and thousands of skillful engineers.

Leading global institutions believe that blockchain solutions can have a huge economic impact.

However, realizing this potential depends on factors such as technological advancement, the acceptance of blockchain solutions by industry and the general population, the laws passed to regulate the blockchain space, and the development of new business models based on technology.

Back to the crypto market

There is a possibility that the recent price increases in cryptocurrencies may be partially or fully justified by changes in the perception of market participants about factors affecting the future prospects of blockchain platforms. In the long run, however, the value of cryptocurrencies depends on the financial added value generated by the blockchain ecosystem.

If we look back on the 1990s and the dot-com boom, internet usage increased tremendously and it was recognized that this would change the world. Hundreds of network related companies appeared and began developing technologies, services, and applications.

Excessive speculation created a market bubble and the crash caused numerous companies to close.

But the Internet, of course, turned out to be revolutionary, and some of the companies that were founded then are now some of the largest in the world.

If the potential of blockchain technology is realized, many of the current blockchain platforms and projects may fail to make the cut, drastically diminishing or disappearing in value.

However, there is a reasonable chance that some of them will be big winners.

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