In my previous article, I mentioned that I notice something about BCH but I said I won't be focusing on it then because I plan on talking about it in another article, well, this is the article. This isn't actually just a BCH thing, but I am going to use it as a case study in the scenario I will talk about because that's our main coin here on readcash.
Yesterday while I was trying to compare the prices of different tokens in the last 7 days on coinmarketcap, I stumbled upon their live Bitcoin chat where different people shared their opinion about the current state of BTC and the general crypto market. One thing I found out is that bitcoin has a very strong support level around the $20k mark. If the price falls below that level, let's just say we are all doomed, it will have to find a new support level which will be very hard to come back from.
I don't want to raise anybody's hopes here but they have been some juicy chatter in the cryptoverse, for now, all I have to say is that we should hope Bitcoin remains strong around the current resistance level, a reversal is around the corner if that happens. There are actually some other factors to consider (like the US approach to monetizing debts) but I won't be boring you guys with the details around that.
The best way to learn about crypto is to survive a bear market - Ferrum Network
Mass adoption in the mud
While going through the coinmarketcap chat, a lot of people were already regretting investing in crypto because they lost a lot of money to this current dip. While reading all that, I had only one thought in my head: "won't all these negative talks scare newbies away?". Heck, it will even make some seasoned crypto traders fold up and run.
How then do we convince merchants to accept cryptocurrency? The obvious reason why a lot of merchants will refuse to get in bed with cryptocurrency is all because of one major reason: the high volatility! As I said earlier, I am going to be using BCH in my scenario, so now let's get on with it
Imagine you're a small-scale merchant who finally decided to start accepting BCH at the beginning of this month and you managed to sell a lot of goods while accepting BCH as payment and then you were able to hold over 2 BCH in your wallet when the price was around $200 (the total for the 2 BCH is $400), it feels good, right?
But you woke up one morning and found $332 in your wallet, you become confused and later found out that BCH dipped by over 17% (that happened last week) and people predicted it will go up later on, so you decide not to panic. Again you woke up the next morning and met just $292 in your wallet. Instant panic mode! You're torn between selling it off at that price even if it means incurring some losses or just keep hodling and waiting for the market to turn around.
Right now your portfolio has dropped from $400 to $225 in just a week and it's looking like things will get worse. As a merchant who already made gains after selling your products, right now you have lost those gains as well as a substantial amount of your capital. Your goods are almost out of stock and you only have half of your capital in cash while the remaining half is stuck in a brutal bearish market.
With all these things that have happened, will you still continue accepting crypto? To be honest, it's easier for regular folks to hodl crypto because a lot of people invest with their free money, but we can't say the same for merchants who accept crypto as a means of payment, at one point they will have to withdraw that crypto so they can restock their goods. So, hodling for a very long time till the market stabilizes is really not a good idea for them.
The volatility to me is the main reason why merchants are reluctant to start accepting crypto and recent activities in the cryptoverse are bound to make a lot of people scared. This is the time a lot of people are selling off their tokens and getting off the crypto market for good, crypto trading is after all a game of emotions and only the strong can survive this brutal bear season.
Conclusion
The fastest way to get cryptocurrency mass adoption is for coins to be free from high volatility, and will that even be possible? Probably not, the volatility is a double edge sword, it's great when it's working in your favor but it becomes devastating when it works against you.
I am learning quite a lot about the cryptoverse just by reading chats in coinmarketcap Bitcoin live chat, at the very least I am now able to make sense of this crazy bear season. I am going to be following things up close to see if some of the predictions I have read will happen or not. Everything depends on Bitcoin right now and that's what I will be watching, that's what determines the fate of most altcoins, especially BCH.
Thanks for reading 💖💖💖
Thursday June 16, 2022
Omo, a lot of crypto videos of people losing a lot to it has scared so many away from it, I remember sometime last year when shiba inu was growing, someone told my brother to buy 50$ worth of it and in a week it will become 100$, that was the same week that it dipped hard and a lot of people lost assets to it, my brother told me that “na so crypto be, I can not do it again o” 😅