When it comes to cryptocurrency, nobody can be sure. Not even Elon Musk. After the Tesla board president and former CEO was asked whether he thought Bitcoin would one day turn into a pyramid scheme, his response had more to do with his belief that a technological transformation of the world was underway, not a crash of the stock market. But the question at hand is whether this technological revolution will be responsible for massive fluctuations of the price of cryptocurrencies as they come and go, or the price of an entirely different, and potentially far more important, asset – labor.
At the outset of the cryptocurrency boom of 2017–18, the world of labor stood to benefit considerably. Because of the technological promise that digital money promises, the cryptocurrency boom was being fueled by a wave of investment from workers looking for a better life for themselves and their families.
The cryptocurrency boom was fueled by a wave of investment from workers looking for a better life for themselves and their families.
But since the cryptocurrency phenomenon has moved to a new phase, there is a new impetus for workers to look for a more secure source of payment in the future. The wave of financial crashes and bank runs that took place before the end of 2017 has also given rise to an upswing of fear of a new economic apocalypse.
To be clear — there is nothing new in the current economic and political situation. In a nutshell, the world of labor faces a serious situation that will be discussed in more detail below — and one that involves what is probably both the most serious financial.
What is happening with cryptocurrency today?
I have been following cryptocurrency news since its beginnings, which was almost four years ago. I have been reading The Economist and Financial Times, two of the top newspapers in the world, for as long as I have been an investor or trader.
The Economist published a fantastic and fascinating article on Bitcoin titled ‘How Bitcoin could blow up’ in October 2017, and, as usual, there has been an endless stream of analysis, opinion, and to support this piece of knowledge.
The world was in shock. For many in the media, this was a time of great turbulence and political turmoil, but, ironically, the cryptocurrency hype-up also took place at a time of great economic turmoil. The UK was hit by a devastating recession and, as it turned out, the next financial crisis wasn’t going to take place in the US or the Eurozone. Instead, the next financial crisis appeared to be in the Asia Pacific (And, to the surprise of many, it was China, not the US).
With the global economic situation in the UK having deteriorated drastically in 2017, the UK government began to look inwards when it came to creating a proper response to this new economic crisis.
The European Central Bank (ECB) was the first central bank and financial institution to initiate something akin to a crisis. The ECB announced in February 2018 that it was going to start printing millions of ‘pegged’ (and thus, denominated) Eurobonds to buy up existing debt in countries that had exhausted their ability to pay back the debt held by their central banks.
The reason for the central banks printing billions-of-Euro of new money to ‘bridge’ the financial gap was to restore confidence in the financial system as a whole and to reduce the chance of an all-out financial collapse. In other words, this new money was meant to stimulate the economic growth that underpinned the government's bond-buying, and in return, the ECB wanted to protect the markets by making sure that everyone who owned this capital had the ability to borrow it at a fair rate so that it would not rise in price. However, as the financial news went on, it became clear that it was not working out that way at all.
When are we going to see the next bubble and have a panic?
First, it is important to emphasize that cryptocurrency has been growing over the last several years and has many people excited (exciting as they should be). Second, the question of when are we going to see the next bubble is really about investor. It’s more about the psychology of the investor and a perception/belief that this is going to happen or when it will really get bad.
I think there are three psychological triggers for this perception and these are:
1) The perception that this could be the “end of the world”
2) Perception that this could be the “end of the world”
3) The perception that someone is going to “be poor” and live a life without material possessions. It’s very easy to get caught up in this and think this is it.
As crypto prices reach the next psychological level, it will become the reality and the market as a whole will see a bubble forming and will then sell and move on. That is the fear and euphoria.
Cryptocurrency and the next financial crisis
At present, the world economy is in a deep recession. Unemployment is rampant and the cost of living is rising at an alarming rate. In a recent speech, French President Francois Hollande said one major reason for the global economic slowdown is the introduction of Bitcoin and other cryptocurrencies.
But is Bitcoin the cause of the economic crisis or has he got it wrong? Is cryptocurrency a bubble, or does it have the potential for a huge success?
The short answer is yes, cryptocurrency could cause the next financial crisis in the next few years. But the answer to the long question is that, the key to understanding whether or not cryptocurrency might be a dangerous bubble, is more important than Bitcoin itself.
While one of the major arguments for Bitcoin and cryptocurrencies like it is being a safe haven for people during economic distress – to provide cheap short-term and long-term investment opportunities, many people believe that cryptocurrency has the potential for a major success story, the potential to become the next giant technology.
Cryptocurrencies vs. the future of the internet
The next economic mega-phenomenon on the way is, undoubtedly, cryptocurrency.
This is a major distinction compared to the Internet, which grew from an idea to become a global network, allowing consumers from around the world to freely communicate, shop, and research services and products.
While the Internet has been the most successful of all the new technological paradigms, that doesn't mean it can continue to develop like it has in the past, especially considering many of these developments, like smartphones, were started with free software. Many of those are examples of how Internet and technology can co-exist.
While a lot of these technologies have come and gone over the last several years, it's safe to say that they've not been abandoned because of the perceived risk they pose to the economy. This is true when talking about the future of digital currencies because that's how much growth crypto enthusiasts are expecting.
Crypto-currency market, the ‘Golden Age’
The Cryptocurrencies had started in 2009, but were not present among general public until 2014. The year 2016 saw several new products or crypto-currencies being developed or released for general public from this time.
These new developments could be categorized into, Crypto-currencies/digital currencies used for payments and assets (XRP, Bitcoin, Ethereum, Litecoin, etc); the new alt-coin (or decentralized digital coin), such as Bitcoin Gold, ETC, and others, which aims to create a new decentralized network; and, Crypto-currencies/digital currencies used for social network trading (BitShares, Golem, Steem, etc)
After the price crisis in early 2017, many crypto-currency markets lost a significant of value as the general public were not aware with the recent developments. This new development resulted in a lot of negative news and negative comments coming from the media.
This could result in the whole crypto-currency and related markets having a negative response. The crypto-currency market has a lot of opportunities for development for both the future and the past but after 2018 when the news came out by the year 2018 that the cryptocurrency market was suffering one of the biggest losses in the history of the world, cryptocurrency markets could have a dramatic change in the upcoming year.
But yet still crypto is stand, so yes cryptocurrency is the new currency in this golden Age!
