Riccardo Spagni aka fluffypony, a lead developer of Monero spoke about the ongoing bear market, which has been ravaging the entire space, during an interview with Tech Central. He also spoke about whether this bear market is similar to the previous ones.
Riccardo started by stating that this is his fifth bear market in the cryptocurrency space, remarking that he is accustomed to the bear’s refuge and added that it’s not surprising anymore. He further stated:
“I think if you if you’ve been in the space for a short amount of time and this is your first bear markets which is entirely possible given that the last bull run before this one was 2013. So anyone who came in after 2013 would have entered during the bear markets and then would have seen a bull run till $20,000. If this is your first crash, then you are going to go like, oh oh no, the sky is falling!”
Investors, who have witnessed the bear market for the fifth time, start to see a trend, he added. However, this trend, according to him, is not unique to Bitcoin or cryptocurrencies and it often occurs in the stocks market wherein a stock reaches it’s all-time high and is followed by crash because of a scandal or market sentiments. Nonetheless, when this takes place, the price settles above the previous all-time high and when the bull race takes place again, it breaches its previous highs, Spagni stated.
Furthermore, the developer was asked whether history is repeating itself. To which, he agreed, stating that Bitcoin is still trying to figure out its price or the market is trying to figure out the price for Bitcoin. He said:
“[…] I mean, we’re several decades away from that [block reward] dropping down to a value that is so insignificant that fees are greater then the block reward”
Taking this into consideration, Bitcoin continues to be the currency with relatively high inflation rate, which is the reason the price discovery is hard, he stated. Spagni further added:
“So, you’ve got a high rate of inflation, you’ve got this massive volatility because there’s irrational exuberance and everyone thinks they’re getting rich and so because of that, you’re going to have highs and lows and the swings are going to be extreme.”
However, he stated that Bitcoin’s price discovery will happen on a macro time scale i.e., in the next 10 to 20 years time span. This was followed by him stating that the price is certainly not going to be $3500 or $4000, adding that it is going to settle “much higher” as the inflation would drop down, making the utility of the biggest cryptocurrency more apparent.
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