Controversy over 'crypto winter'
Some experts say that the signs of the "crypto winter" of 2018 are returning while others believe this is only a small fluctuation.
Forbes quotes analysts from UBS Bank as three signs that a new "winter" may be approaching. The first is the policy of tightening monetary policy of the US Federal Reserve (FED). Next is the limit of technology. Blockchain, the underlying technology of cryptocurrency projects, is difficult to scale. Because of its decentralization, blockchain needs all members of the network to be able to monitor and verify transactions. Matthew Rosenfeld, the founder of the Signal application, thinks blockchain is still cumbersome and lacks focus. Meanwhile, Ethereum network participants are constantly experiencing network congestion and high transaction fees.
Finally, a flood of negative information from regulators around the world. This week, Russia proposed to completely ban mining and cryptocurrency exchanges. A country with an open policy with cryptocurrencies like Singapore also announced to tighten related legal activities.
However, not everyone believes that "crypto winter" is coming, Dan Morehead, CEO of investment firm Pantera, told Insider that blockchain in general and cryptocurrencies in particular continue to thrive because of the community. The user base is much larger now than it was four years ago. Blockchain is also applied more widely than cryptocurrencies such as Gamefi (financial matching game) or Defi (decentralized finance), so this technology is difficult to "freeze".
Lynn Hoang, Binance Southeast Asia representative, said that the cryptocurrency market cycle, which rotates every three to four years, is undeniable. However, according to her, winter can happen, but it will be very different and will not last as long as 2018. "If winter comes, it will be a purge in a positive direction. The projects are not sustainable. , poor quality will be eliminated. This is good for both the community and the market," she said.
Sharing the same opinion, Mr. Tran Dinh, administrator of the Universal Blockchain Forum, believes that the market will undergo a new adjustment period. "In the past two years, a series of projects were born and hot growth led to FOMO (fear of missing out) in the community. Many fraudulent projects appeared, causing many people to lose money. So here is a necessary correction, not necessarily a crypto winter," he said.