Is the Current Crypto-Bear Run Comparable to 2014?

2018 hasn’t been a good year for the cryptocurrency market in terms of prices. The first five months have seen most virtual coins lose 60 percent or more of their values. This comes after the year-long bullish trend of 2017, prompting many people to compare the current bear run to what happened back in 2014. What’s interesting to note is that this year’s bear run shares few similarities to the bear run four years ago. There are many reasons to believe that this bearish sentiment will turn bullish sooner rather than later.

Identifying the Difference

If you’re actively trading or holding cryptocurrencies, then you’ve probably stumbled upon speculators saying that we are during a crypto-depression, resembling the 2014 bear run. Four years ago, Bitcoin wasn’t as popular as it is today. But in January of 2014, BTC price reached a high of $864. By the end of 2014, however, its price dropped by 60%, finishing at about $200.

Mainstream media was quick to label Bitcoin as the worst currency of the year. That might sound too harsh, but it was a reasonable statement considering the lackluster performance of Bitcoin compared to nation-state issued currencies. One of the reasons for this was the hacking of Mt Gox, the most popular trading platform at the time.

Before the Mt Gox hack, there was a quick but short-lived bull run. Many people think that the same thing has happened this year. The current bear run follows a bullish trend that lasted the entire 2017. But that’s where the answer lies; the spike in prices prior to the 2014 bear run didn’t last long, like what we now see almost on a regular basis in the crypto-space.

A lot has changed in the realm of trading platforms as well. Although many exchanges continue to struggle with hacking incidents, the cryptocurrency market has shown incredible resiliency to these attacks. For instance, the Bitfinex hack only caused prices to go down for a day or two. This year, Japanese exchange Coincheck lost more money than Mt Gox but the market quickly recovered. People now understand that one exchange going down doesn’t signal the end of cryptocurrencies.

Cryptocurrency exchanges have also become more resilient. Bitfinex and Coincheck are still alive and well right now. Mt Gox and other fallen exchanges in 2014, meanwhile, are nowhere to be found. Despite all the hacking incidents, an increasing number of people continue to trust these exchanges to get started with their Bitcoin venture.

Better Infrastructure and Mainstream Investment Channels

In 2014, only a handful of trading platforms and brokerage services could be found. Now, the infrastructure of the crypto-space is miles ahead of its 2014 counterpart. People can choose from different exchanges where they can buy digital assets. Wallets, payment processors, and brokerage services are everywhere, allowing investors to get their hands on their desired coins and keep them safe. Cryptocurrency mining software like Bitcoin Code has also provided the opportunity for beginners to start mining virtual coins.

What’s more, 2018 has seen the rise of traditional crypto-investment vehicles. Some of the most popular include futures, exchange-traded notes, options, indexes, and hedge funds. These digital asset investments have compelled more investors to put their money into crypto, particularly those who have recently jumped on the train.

Increasing Media Coverage

If you keep up with news in finance or read business-related blogs, you probably see or hear about Bitcoin almost daily. The increased media coverage has helped the average individual to learn about cryptocurrencies and what they really are. Bitcoin also managed to catch the attention of mainstream media back in 2014. In December of that year, the price of BTC reached a high of $1,250. That was a staggering number, but nothing when compared to the December 2017 all-time-high that reached almost $20,000.

Mainstream media has started to give more attention to the cryptocurrency market on their weekly broadcasts. Even major news outlets couldn’t resist talking about Bitcoin. When it reached the $10,000 milestone, nearly all new publications had it on their front page including Time Magazine, the Wall Street Journal, and Bloomberg. This is far from what happened in 2014 when mainstream media only talked about Bitcoin to mock it after losing considerable value over the course of the year.

Surviving the Waves

A survey conducted in February 2014 reported that 80 percent of participants said they had zero interest in cryptocurrencies and would rather invest in gold. But this year, almost everyone has heard about digital coins and their unfathomable rise in value. This trend can be seen across the globe, with cryptocurrencies increasing in popularity in different regions.

Thanks to a stronger cryptocurrency ecosystem infrastructure, more media coverage, and an increase in adoption rates, it’s safe to say that the current bear run wouldn’t last if that of 2014. The tumultuous value cycle is to be expected, but it’s one of the things that make the cryptocurrency market such an exciting place to invest in.

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