The crisis has caused panic in the community, with bitcoin miners selling activity hitting a seven-month high as BTC mining profitability plummeted to October 2020 levels.
Bitcoin’s fear and greed index fell to a record low of seven in the third quarter of 2019 since the pre-pandemic period, signaling “extreme fear” on June 15.
According to some industry experts and executives, these and other recent developments in the industry do not look good, but only at first glance.
People in the industry continue to reiterate that bear markets are actually good for bitcoin and healthy for the crypto industry because they remove speculators and scams while providing a place to build genuine and great products and services.
“The current situation bodes well for bitcoin in the long term, clearing the market from leverage, scams and unscrupulous institutions,” Treasure Bitcoin analyst Joseph Tetek told Cointelegraph.
According to Tetech, past bear markets have spawned several important projects, including the Lightning Network, a major bitcoin-related project that enables cheaper and faster bitcoin transactions. The Lightning Network was initially conceptualized during the 2015 bear market.
Crypto winters or bear markets offer more opportunities to build as speculation leaves the market, Tetech said, stating:
Bitcoin (BTC) and the overall cryptocurrency market are experiencing one of their most critical moments since 2018, wiping away more than $1 trillion in market cap since early 2022.
“Bear markets are good for bitcoin. Builders face fewer distractions and fake “project founders” who were just looking for a quick VC funding and a naive retail exit. Liquidity disappears as quickly as it appeared. Real builders are happy when all the rubbish is washed away.”
Bitcoin Suisse CEO Dirk Klee told Cointelegraph that the crypto market needs to go through the crypto winter in order to grow and mature. According to the executive, the quality, stability and security of crypto services and products become even more important during uncertain market conditions. he said:
“After all, that’s what the industry needs to mature further, and we aim to live up to those standards every single day.”
Similar to broader markets, bitcoin and the entire cryptocurrency ecosystem have historically evolved in cycles. Many Crypto Supervisors argued that bitcoin has “never traded below its previous cycle peak.”
Good Morning. pic.twitter.com/gFyjSkqWZL
— Lynn Alden (@LynAldenContact) 14 June 2022
According to Kraken CEO Jesse Powell, bitcoin’s price cycle is based “much like the one surrounding the bitcoin halving”, a one- to four-year event that halved the bitcoin block reward, which historically stymied the demand for bitcoin. increased and eventually led to a bull market. ,
related: ‘Feels cheaper than this:’ BTC undervalued and oversold, says Fidelity executive
Powell is known to accurately predict the crypto winter of 2022. His previous prediction that bitcoin would reach $100,000 by the end of 2021, however, failed.
