High price volatility, the hacking vulnerability of exchanges and the potential role in money laundering has earned Bitcoin and the entire crypto-assets market the reputation of a “wild west” industry.
The original wild west era was famous for cowboys, native Indians, the lawmen, gunslingers, the pioneers, the prospectors, the gamblers, the scouts, the outlaws, the gangs and the gunfighters. It was crazy out there and there wasn’t to many guarantees of returning home alive from the streets.
A Very Risky Marketplace
The cryptocurrency market of today is characterised by some of the underlying features of the wild west era. While opportunities abound to make a fortune in very short periods, the risk of losing everything is very paramount.
In the closing stages of 2017, the overall cryptocurrency marketplace achieved its most significant bull run amidst high volatility. Investors in this period made a kill as most of them turned over their investments capital multiple times. The market was so attractive that even until the later stages of the price surge, the influx continued.
Unfortunately for the late comers, what seemed like a minor retracement in January 2018 has turned out to be a major downward trend. The crypto market has spent the most part of the year trading in a downward direction, with momentary bounces and sideways trends.
Bitcoin lost over 60% of its highest value and is currently in a tight channel that has left the community uncertain of the direction of its next major move. It is this uncertainty and how quickly things can change in the crypto market that qualifies it as a high risk environment to exist in. Just like the “Old West” of early 19th century where survival was not guaranteed.
Anything is Still Possible
In the $6,500 region that bitcoin finds itself as at the time of writing, it is trapped in-between a number of historical supports and resistances. The word “breakout” has become very common among analysts who are anticipating a significant market movement.
There are postulations of a likely upward breakout for bitcoin. This opinion is formed largely as a result of likelihood of favourable regulation that could motivate the influx of institutional funds. Although there have been a number of rejections by SEC on ETF approvals, the crypto community largely believe that it is only a matter of time before one or more is approved.
Bitcoin has lived its entire life so far as a knight in shady amour. The extent of volatility and radical market behaviour has been connected to the typical character of an emerging market with utmost potential. Despite being around for almost one decade, the disruption associated with the technology across numerous industries seems to be attracting so much attention.
While the ecosystem acknowledges the enormous potential of bitcoin and the entire cryptocurrency industry, the era within which the technology exists as at the time of writing can indeed be likened to the Wild West of the 19th century. The streets are Wild with enormous potential, but there is no guarantee of survival for its occupants.
Iyke Aru is a seasoned author and educator in the blockchain and cryptocurrency industry. He has been in the business of crypto content writing for many years with thousands of his articles across several platforms on the internet. Iyke is based in Nigeria where he stands out as one of the most informed and credible figures in the cryptocurrency industry. Outside blockchain and crypto, you will most likely catch Iyke playing or discussing football with friends and family.