Is crypto hype gone? Bitcoin and other cryptocurrencies have seen a drastic decline in value over the past few months, both in terms of trade volume on all major exchanges, transaction volume, and the overall interest in both traditional media and social media sources. This recent downward trend has left people wondering if this is the end of cryptos or just another yearly dip after a parabolic bull run?
Numbers Do the Talking
The market capitalization of the cryptocurrency market has more than halved since its All Time Highs (ATHs) back in early January.
This trend is mirrored by the bitcoin price chart. At its peak, bitcoin hit $19,869 USD, before briefly crashing to a third of that ATH to $6320 by February 6th. The rapid dip was a major wake up call for everyone in the crypto space, reminding investors that with high reward comes high risk in such a volatile and still nascent market.
The graph of bitcoin’s daily transactions and unique addresses also gives us a glimpse into usage and adoption of the cryptocurrency, a proxy indicator of how many people are interacting with the new technology. The decline in both these charts is on par with the price of bitcoin.
Bitcoin Unique Addresses used – Courtesy of Blockchain.info
Media Analytics Highlights the Crypto Hype Plummet
The same trend can be found on crypto websites like ours and others. The decline in article view counts spanning crypto news outlets is evident, as is their monthly visitor count, which has stopped growing and is in a slight downtrend based on Alexa Rankings.
Additionally, social media interest in bitcoin and other cryptocurrencies is beginning to decline. On Reddit, the /r/Bitcoin & /r/Cryptocurrency subreddit subscriber growth has plummeted.
Views and subscribers on Youtube have also been significantly affected. Engagement and searches in Google Trends show an obvious decline in interest. The trend graph shows the interest over time for people that search for the term “Bitcoin”. This graph reflects, as it often has, the price of bitcoin.
This is evidence that most people only care about price, rather than the technology. The sideways trading action in the market over the past months has led many observers to become “bored” with only minor double digit movements, and even less people are interacting than before.
So… Where Do We Go from Here?
If you think back to the month of December all the variables capable of demonstrating the rise or fall of bitcoin seemed to align in favor of the former. The collective conditions were primed to instigate the massive spike in the cryptocurrency, leaving many feeling like their money was printing itself in front of their own eyes.
After the Chinese ban on exchanges in September, Bitcoin started climbing at a rapid pace, breaking through thousand-dollar barriers with apparent ease.
By the end of November and, significantly, Thanksgiving weekend in the USA, everyone had heard of the parabolic inflation in bitcoin’s price. It was all over social media, traditional media, state television, news outlets and the internet.
Coinbase released a statement to say that 100,000 users had registered to use their exchange over the Thanksgiving weekend, and mass adoption seemed to be in full gear. Crypto hype had reached fever pitch.
Additionally, the end of year and the Christmas holidays gave bitcoin a final surge beyond everyone’s expectations to reach its record-breaking ATH.
Another factor contributing to this rally was how everyone was spending time with families and social gatherings, where the trending topic of the holidays was bitcoin and these new digital currencies that were to become the future of finance.
This enticed novice users to start investing in cryptos. Everyone was making money and it seemed like an easy game to enter. Adoption of bitcoin and other cryptocurrencies grew, but not because of a growth in utility value, but the potential profits that could be made in the market.
Bears Are in the House… At Least for the Time Being
Will interest pick back up again? Perhaps once volatility enters the market again, especially if we see a breakout to the upside. However, despite fundamentals boding well for the future, it appears many people were burned by the last crash and sold out or otherwise became disinterested.
Overall there is a lot of uncertainty in the market right now, and it is difficult to predict a crypto hype-driven rally of the size of that which occurred in December any time soon.
Have your say. Where do you see the bitcoin price heading? Do you think interest has waned permanently?
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