What Will It Take For The Crypto Market To Regain Strength?

Cryptocurrencies are struggling to maintain prices, with leading crypto Bitcoin sitting at 70% off from it’s all time high. In November, Bitcoin went to $69,044, a price point it has since plummeted from. Right now, Bitcoin is trading around 20k mark and investors fear this is not the low point it might go. 

Billionaire entrepreneur Mark Cuban has weighed in on the bear market suggesting that the downturn in the market won’t end until there is a utility-focus on the industry. Well known as one of the main investors on Shark Tank, Cuban believes that the market is not at its lowest yet, and that it might still sink further. Cuban isn’t a crypto critic – he has previously stated that 80% of his portfolio outside of Shark Tank was in crypto, with 30% of it sitting in Ethereum (ETH) because it is one of the key utility tokens in the market.

Cuban predicts the market as it currently stands will continue to trade as it is until there is a use case for the industry’s projects, or until it gets so low that new investors decide to enter the market. 

As part of the Bankless Podcast, Cuban commented:

“[The bear market] lasts until there’s a catalyst and that catalyst is going to be an application, or we get so low people go… I’ll buy some’”.

Is Bitcoin cheap right now?

While Bitcoin might be far off the record high it has seen, the price is still sitting around the previous all-time high before the most recent bull run. According to the Shark Tank investor, Bitcoin is still “not cheap” given that there is still a massive billion dollar market cap:

“You look at the market caps, and you see it’s a billion dollar plus market cap or $6 billion or $8 billion or $40 billion you don’t look at that and go ‘that’s cheap’. If you remember back to DeFi summer, these things were selling for less than a penny and their market caps were in the hundreds of millions.”

Risk-off investors might be concerned about Bitcoin’s recent downturn, but looking at the market cap and ROI over the past few years, BTC is still a massively profitable asset. 

Historically, Bitcoin has gone through cycles of bear and bull runs. Cuban believes it will take utility to shake this bear run and turn the market around for prices to increase. However, taking into consideration the previous pullbacks and increases, the current bear market might just need time for the cycle to turn bullish again.

Source: Arcane Research

It is also worthwhile noting that Bitcoin is now more intertwined with the overall financial market than ever before. Previously, Bitcoin and global stock values did not have much of a correlation in price. Now, the broad financial market does have an impact on the crypto market. With federal regulation extending, stock – especially tech stock – and global tension currently fairly shaken, it might be a case of global volatility in the macro-environment that is rattling the crypto market.

For trading and investment, buying Bitcoin while it is lower is a strategy that long-term holders will take. Ultimately, when the market corrects and Bitcoin price starts climbing again, buying Bitcoin during a bear run can pay off well in the future if investors choose to buy – and hold – and play the market rather than selling off out of fear and emotion. 

For traders who are new to trading on the cryptocurrency market, we would recommend using an automated trading system. These systems are cutting-edge and are able to place trades on your behalf and hold cryptocurrency for you. Before choosing one, please do your homework. We recommend reading reviews like this Bitindex Prime review to help you understand the tools main features. These tools are also used to scan the markets and find profitable trading opportunities using automation. 

As the current crypto winter draws to a close, it is  possible that a significant number of currencies will just disappear. There is a possibility that many penny cryptocurrencies, which are investments that are very speculative and volatile, would fail completely, with no chance of recovery. However, cryptocurrencies that are considered to be “blue chips,” such as Bitcoin, have a greater chance of surviving the storm.

Coins that are ranked in the top 500 by market capitalization are more likely to produce good returns over the long term, regardless of price.

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