Hello everyone,
Many wonder whether cryptocurrencies have died, and the answer might surprise you. Since the first launch of Bitcoin approximately in 2010, the price of BTC has grown strongly several times, followed by a collapse, which was influenced by a number of different factors.
Despite the availability of technology that solves a number of existing problems, there are also members of Pump & Dump groups and traders on the market who trade daily. To this can be added phases of mania, for example, the altcoin season that began a few years ago, or the more recent ICO boom that happened last winter. The collision of all these driving forces creates chaos in the market that makes short-term price predictions almost impossible.
Thus, the question “are cryptocurrencies dead?” is absolutely wrong, instead the question should be “does cryptocurrency solve some acute problem?”. This is the single most important question that can be asked, because the answer to it is decisive for making a profit. Paul Graham pioneered the concept of the “hot problem,” which became popular because startups found it difficult to define a problem and come up with an effective solution, leading to their shutdown. An example of a “hot problem” would be not being able to get groceries for any reason, while creating another copy of Pinterest or Wikipedia is not a solution to any “hot problem”. As a result, successful startups either solve the problems that define people's lives or offer a product dozens of times better than what is already available.
So, in order to understand whether a certain project solves a “hot problem”, you need to look at its users, whether they exist in principle, and, if so, whether any of them are progressing slowly or rapidly. To see the true growth potential of a technology that does not depend on the chaos in the market, it is necessary to see the development of integration, provided that it solves the “hot problem”.
Integration is the only metric worth looking at, and if you're hunting for short-term profits, you're wasting your precious resources. If we imagine the development of integration on the chart as a green line, and, for example, the result of the Pump & Dump groups as a blue line, then we see how over time the price is artificially inflated and then also decreases, but only to the level of development of real integration. Add to this the periodic manias marked in red that lead to price bubbles.
Despite the linear development of the price of technology that solves the “acute problem”, its perception does not correspond to reality due to the influence of external factors. It seems to people that the price of an asset has fallen a lot, although this is just the end of a speculative cycle and its real price has been growing. This can be seen from the price segments A1…A4.
In conclusion, we can draw the following conclusion: do not be distracted by HYIP and chaos, instead follow the integration of technology into the real world. Most market participants are so keen on speculative processes that they cannot withstand price cuts from the next ATH, lose control and are amenable to emotions.