In recent months, the cryptocurrency market returned to a market capitalization of $1 trillion (the total USD market value of crypto today). Even though the market appears better than at the end of 2022, it is still far from 2021's $3 trillion peak because of the negative media background. Is cryptocurrency still a worthwhile investment in an economy with high inflation and recession risk?
The trend toward widespread acceptance of cryptocurrencies implies that this asset class is gaining legitimacy. Cryptocurrency has a long way to go before becoming a fully-fledged alternative to traditional financial instruments, but it is making significant progress in acceptability and usage.
Cryptocurrencies are, and will likely remain, at the cutting edge of modern technological development, and many governments are taking a close look at blockchain technology and its potential uses. Many countries are considering having their central bank issue a digital currency. The trend is that cryptocurrency may, in the future, replace natural money turnover. Some countries even take cash out of circulation; for instance, in the Netherlands, you can barely find a way to pay in FIAT.
After traditional forms of payments fade into the past, the necessity for a fiat would also be eliminated. This will allow a national cryptocurrency to take its place as a universal payment system that can be used anywhere globally. However, cryptocurrencies currently do not pose a significant threat to fiat currencies. Ideally, it is required to merge cryptocurrencies with fiat currency now. So far, for 10 to 15 years, it will flow from one ecosystem to another.
Scandals that affect the crypto industry. Is it that bad?
On the other hand, we have evidence of many scandals connected to crypto institutions' collapse. Starting from FTX's speculative actions with its own company Alameda, following the sharp drop of bitcoin and the recent closure of the 24-year-old institution Signature bank. Another shot was Silicon Valley Bank. It was the 16th biggest bank in the United States and was the go-to financial institution for high-profile venture capitalists and new businesses in the technology sector. The structure eventually fell apart after only a few short days had passed. A total of $42 billion was taken out of depositors' accounts in a single day as they rushed to clear their balances.
When it came to financing unicorns, startups, and technology, SVB was king. The bank also housed the reserves of several cryptocurrency firms. Although SVB's shocks were enough to send tremors throughout the market, the failure of other lenders like Signature Bank and Silvergate amplified the knock-on impact on cryptocurrency prices. Scandals of this kind have wholly undermined the credibility of the crypto industry. But if you start digging into details, things are okay. To protect your crypto assets is easy; avoid speculative crypto platforms of crypto banks, which take deposits, after utilizing the stakes to create loans. As a result, loans may go wrong, and depositors panic and demand their money back, but it is gone. It is how collapse occurred and severely threatened the global financial system and crypto industry.
Any chance to keep your digital assets safe?
To protect your crypto is easy; avoid speculative crypto platforms of crypto banks, which take deposits, after utilizing the stakes to create loans. As a result, loans may go wrong, and depositors panic and demand their money back, but it is gone. It is how Signature collapse occurred and imposed a massive threat to the global financial system and crypto industry.
The most straightforward decision is to use the safest way to store cryptocurrency assets - cold wallets. Many credible platforms assume risks for cryptocurrency volatility. So, if you want to get all your FIAT money back, crypto payment gateways like 1TN are the right choice to make your digital assets safe. Compared to traditional banks, more people are running into bureaucratic bank problems. Especially when Russia invaded Ukraine in 2022, many people from Ukraine experienced issues with receiving money abroad.
Moreover, banks can close, and they go bankrupt. The state covers part of the funds, but these tiny amounts in Europe are 100K EUR, and Ukraine is about 5K.
New decisions are about to become a serious competitor to the banking system. Simple and safe "neo-banks," mobile baking, and fintech solutions like 1TN crypto gateways will become even more sought after despite the scandals.