The cryptocurrency market is continuing to rebound after a shaky day yesterday. Coincidentally, the Dow Jones plunged a total of 1,100 points yesterday, around 4.6%, which is the lowest since the European debt crisis back in 2011. The stock market corrected itself from yesterday’s downfall, is there a correlation between the two? I really don’t think so.
The cryptocurrency market crash plummeted yesterday, due to the Chinese government implementing a regulation completely banning its citizens from viewing cryptocurrency websites, via a government-ran firewall. Many analysts are stating that yesterday’s drop was due to rising inflation and the usual market correction. This shows that there is absolutely no correlation between the drop of the two markets.
Back in 2008, the original cryptocurrency, Bitcoin (BTC), and its blockchain were born. It was due to the housing financial crisis, where the banks (due to greed) crashed the entire stock market. Satoshi Nakamoto, the Alias, and originator of Bitcoin envisioned a decentralized digital currency that isn’t controlled by a singular entity – this was Bitcoin’s original promise.
Bitcoin as an Investment Asset?
However, the issue most individuals are having with Bitcoin is that it is failing to live up to its original promise. Bitcoin and its blockchain were intended, by its unknown creator, to be a peer-to-peer electronic cash system. Its current scalability issues have resulted in slow transaction times and high fees. BTC remains the top cryptocurrency with the highest total market cap and highest price, however, it could be passed in market cap this year. Just a year ago the digital currency held 85% of the total cryptocurrency market cap dominance but now, is currently only 35%.
The digital token just this year has transitioned from a digital currency used for peer to peer transactions, to an investable asset, like gold and silver. Many new altcoins on the market are being used as a payment and transaction system instead because their transaction confirmation time is 10 times faster than that of Bitcoins.
Bitcoin doesn’t even come close to Litecoin (LTC), DASH (DASH), Ripple (XRP), and Stellar (XLM) when it comes to transaction time confirmation. Some Bitcoin holders now use the cryptocurrency to purchase large ticket items, such as houses and cars but day-to-day payments with BTC do not occur.
If Bitcoin developers can agree upon and fix its scalability issue, it could potentially switch back to its original goal. However, with faster blockchain projects/coins popping up every day, I believe that it is highly unlikely.
Featured Image: Gizmodo