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We’ve bottomed out! Bitcoin can only go up from here. $6,000 USD… No… $5,000? Okay, $3,000 is the definitive barrier. It’s only up from here. Just hold on. 2019 is crypto’s year. One bear conservatively reduced his end of year price prediction from $25,000 to $15,000.

If all of that sounds crazy, it’s because it is.

Since crypto captured the world’s attention at the end of 2017, rocketing to almost $20,000 dollars before losing almost eighty percent of its value by November, debates have raged over the future of the market. Almost daily, another crypto evangelist can be found shouting that an unprecedented rise is just a few weeks away. And that’s starting to become a problem…

Much of the blame for crypto’s stagnation and decline has been placed on two factors, uncertain regulation and speculator sell-off. Analysts promise that once concrete legislation is laid down by governments for the incorporation of crypto into more traditional financial spaces, prices will go to the moon. Regulation means less uncertainty about the legality of cryptocurrencies and greater adoption.

Speculator sell-off pegs crypto’s decline to investors who jumped into the market during the rise, failing to understand what they were actually buying, and cutting their losses post-crash. This may help explain the initial drop at the beginning of the year, but it is unlikely this is still a driving force in the November collapse.

So why are Bitcoin and other cryptocurrencies tanking so hard? The ugly truth is that the crypto community, the many of the true believers, may be responsible.

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Market leaders keep shooting themselves in the foot. It appears that major industry players at Tether and Bitfinex were manipulating the price of Bitcoin during the rise last year, leveraging their market control to create flurries of fake activity and send the price higher and higher. Combined with countless fraudulent ICO scams and the usage of Bitcoin to fund illegal activities, the last thing crypto needs is for “legitimate” players to be engaging in illegal schemes.

Major players have also been delegitimizing crypto through greedy infighting. While occasional hardforks make sense when philosophical debates arise over network updates, the recent Bitcoin Cash fork was unnecessarily childish and violent. Both sides went to war over the future of the currency, including threats to completely destroy the other coin.

This highlights two problems with the crypto community: fragmentation and individuals with too much power. Forking networks for different functionalities… okay on occasion. Forking networks for individual gain and waging war on the opposing network… concerning and illegitimate.

If the crypto community is actually worried about impending government regulation making or breaking the market, they need to shore up their practices across the board. No cryptocurrency will be regulated favorably when the market is wrought with fraud, scams and selfish infighting.

However, turning the page on scummy activity, while vital to long term success, may prove impossible for many players. Uncertainty breeds uncertainty. The lower the price drops, the more desperate major players become, making shady activity more appealing. More fraud equals less favorable regulation, fewer adopters and decreased valuation.

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Crypto evangelists are too often looking like snake oil salesmen. Manipulation is tainting trust-less networks. The crypto community has to find its feet and square up before they can hope for widespread, positive adoption.

Decentralization, one of the aspects the community prides itself upon, may make this hard. No one with the power to make positive changes, to behave more sustainability, has the incentive to do so, as more conservative positions could lead to a further decline in valuation, and another drop could kill off more exchanges and firms. Bitcoin’s other decentralization problem is that so much of the market is controlled by a handful of accounts, giving these whales immense influence over the market – something that makes the market less decentralized than would be ideal to foster a stable store of value.

Ultimately the crypto community needs to take a long, hard look at their practices to ensure that Bitcoin and crypto can flourish in the future. Rampant fraud, a shady evangelists promoting “trust-less” environments and too much centralized control need to be dealt with before government regulation sets their own harsh rules as a reaction to the activity in the crypto space. Crypto has the power to revolutionize the global financial system if the community doesn’t squander its potential with greedy gut reactions to short term panic.

For now, the evangelists need to hop off their soapboxes and stop proclaiming $500,000 valuations. Even if Bitcoin does eventually go that high, these are not the conversations we need to be having right now. Regulatory compliance, sustainable growth, stability and technical hurdles should all be on the docket, not hypemanship. Regulation and outside interest will define crypto’s valuation in the future, but that’s not what is wiping out value right now. When searching for answers to why the most recent drop occurred, the community should start by looking in the mirror.

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Featured image via Shutterstock.

 

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