Despite the price swings, most of the Altcoins are in a ‘life or death’ situation
The ongoing war between Russia and Ukraine has led to massive changes across the financial ecosystem. One thing that is playing a big role amidst the crisis is ‘cryptocurrency’. In the past week, cryptocurrencies like Bitcoin and Ethereum have lost value and gained them back in a matter of days. However, despite the price swings, most of the altcoins are in a ‘life or death’ situation. Bitcoin killers that emerged out of the blue after ‘cryptocurrencies’ became a buzzword are now looking for a last resort where they take shelter to sustain the geopolitical blows.
When Russian President Vladimir Putin announced a ‘military operation’ a few days back, Bitcoin went to as low as US$35,082.66 and Ethereum fell to US$2,350.25. All other major altcoins also faced the blow. However, the geopolitical situation took a different turn when Russia started using digital tokens as a tool to evade US sanctions. On the other hand, Ukraine, the befallen country from the Russian invasion, is collecting funds in form of Bitcoin and Ethereum to support its citizens. According to reports, the Ukrainian government is using cryptocurrency crowdfunding to provide basic services to its people. These major happenings have changed the tailwind of many digital tokens. However, despite the ongoing price swings and uncertainty, altcoins are emerging as the biggest losers. Many potential Bitcoin killers are now performing under questionable circumstances. Therefore, we see where these altcoins could move forward from here. Can they really sustain the blow or will they become one of the many cryptocurrencies that have disappeared in thin air?
Can Cryptocurrencies Really Die?
Yes, the so-called ‘dead coins’ or ‘Crypto Graveyard’ really exists. But how come cryptocurrencies end in a graveyard? Let’s start by exploring the basics. Generally, when either a developer abandons a project or its trading volume drops below US$1,000 for more than three months in a row, cryptocurrency death happens. But both these things happen when cryptocurrencies are created without a strong plan in mind. When the circumstance changes, the nature of digital tokens can’t change. However, they can’t comply with geopolitical blows like the one going on in Ukraine. That is when they fail to comply with the market scenario and sustain the situation. Particularly, altcoins fall victim to this circumstance very often because some of them are built with a fragile motive.
On the other hand, we also have crypto scams that are taking a toll on investors’ money. OneCoin scam remains the largest to date and probably taught traders a lot of value able lessons. The cryptocurrency gained popularity between 2014 and 2016. The platform that acted as the only source to cash out OneCoin was shit down in 2017, resulting in investors losing US$4 billion.
The Increasing Number of Altcoins’ Failure
Most of the altcoins try to follow the footsteps of Bitcoin. The developers try to imitate the nature of BTC or sometimes Ethereum. But truly, a lot of them couldn’t even active 50% of what Bitcoin and Ethereum have done so far. They disappear in thin air due to a lack of long-term viability. As of May 2021, over 2,000 cryptocurrencies have failed and a lot more failures are yet to be discovered.
According to some experts, the cryptocurrency market might completely disappear in a decade or two. They compare it with the 1990s dotcom bubble that went bust at the time. But one thing that makes Altcoins the first victim of changes is their non-planned nature. The crypto developers don’t spend enough time designing a business use case for their tokens and coins. They just launch their idea of coins without considering the economic and geopolitical changes.
Geopolitical Concerns Taking a Toll on Altcoins
The Russia-Ukraine war is not the first time geopolitical changes took Altcoins as victims. It has happened earlier also when there was ongoing civil unrest and increasing economic struggles in Turkey. But now, the situation is even worse for the potential Bitcoin killers because the cryptocurrency market has gained more dominance than ever before. Therefore, just like the stock market and NIFTY, cryptocurrencies including Bitcoin and Ethereum, and other altcoins are experiencing a value decrease.
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