Bitcoin and the cryptocurrency market, in general, is going through a bleak period—even within the context of a year when prices have steadily been in decline. After a mildly positive run in July, August has seen prices decline to new lows in 2018. However, despite the present malaise, one enthusiast believes that Bitcoin will make a significant recovery.
Bitcoin, Just Like Tech Stocks, Will Recover After the Crash
According to Meltem Demirors, the chief strategy officer at CoinShares, Bitcoin, like other new technology, takes a bit of time to reach maturation. Speaking to CNBC on Monday, Demirors said that Bitcoin was struggling with a narrative problem. As a result, investors don’t yet know what to peg BTC down as: currency or commodity.
“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,” said Demirors.
Demirors believes that Bitcoin will recover after the speculative bubble bursts and companies start building real utility based upon cryptocurrency and blockchain technology. She drew parallels with the situation surrounding the tech market at the height of the dot-com bubble. According to Demirors, Bitcoin has the potential to become the next iconic tech asset story, following in the footsteps of Microsoft, Apple, Amazon, etc.
Suggested Reading: Learn more about Bitcoin in our comprehensive ‘What is Bitcoin‘ guide.
Cryptocurrency Needs Better Metrics than Price
Commenting on some of the issues plaguing the nascent cryptocurrency market, the CoinShares executive highlighted the need for better metrics to gauge the industry. According to Demirors, “Really the only metric we have for most cryptocurrencies is the price, and price is such an imperfect metric. What does actual utilization look like? That’s really the struggle for crypto right now.”
2017 saw the ICO movement begin to gain momentum. However, much of it has been about raising funds with little or no real utility from the scores of ICO projects. Recently, Unhashed reported that investors had lost almost $100 million in ICO exit scams.
Demirors believes that a greater emphasis on utility based on the total addressable market of a crypto asset rather than price movement is the key to improving the rate of real adoption in the industry. The cryptocurrency advocate identified that some progress had been made in this regard.
“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.”
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