The global crash in cryptocurrencies could signal the beginning of a new chapter in which “backing” and “regulation” are part of the story.
As the turbulence that shook the crypto world in recent weeks begins to subside, the groundswell of wariness about this emerging ecosystem will likely linger for quite some time.
You might ask yourself how cryptocurrencies that not long ago lost so much will be able to come back and become the money of the future that produces wealth?
The domino effect that knocked over traditional cryptocurrencies began thanks to the indications by the US Federal Reserve of its intention to keep hiking rates to tame record-high inflation. All risk assets – including high-yield bonds and technology stocks – collapsed. The recent collapse of most cryptocurrencies does not necessarily mean that gradual, but relentless progress made by digital money has come to a halt.
Cryptocurrency adoption keeps increasing yearly.
According to coinmarketcap, the number of cryptocurrencies worldwide went from 66 in 2013 to 10,397 in February 2022. Cryptocurrency holders are increasing.Why are more people willing to invest in crypto?
“Supply always comes on the heels of demand.” -Robert Collier
We must also clarify that not all crypto experiences the same shock and collapses even though stablecoins did not live up to their promise and revealed that their parity with the dollar could be highly precarious. Tether and Binance, for example, did not.
About 13 years ago, 10,000 bitcoins barely paid for a pizza. Today, the same number of coins is worth just under US$300 million; this is a significant example of the long-term growth trend cryptocurrencies are experiencing. So even with the shock, digital money is proving to be the future of money.
The instability of stablecoins is a disappointing event in the early history of cryptocurrencies but not the final say in the matter. The question left hanging is whether the entire ecosystem can function pegged to the mathematical logic of gold, i.e., sustained exclusively by people’s perception and not by elements that give any absolute validity to the currencies.
All experts agree that the backdrop to this crisis was the absence of rules. In a matter of days, many investors went from feeling a sense of autonomy to entering blind panic, so now the question is how this can be regulated.
The words “regulation” and “backup” are beginning to appear in the “crypto” vocabulary.
Extreme volatility can only be countered by backing digital currencies with tangible assets. In my view, if that backing translates into startup equity, it can foster a healthier ecosystem connecting investors of all kinds with high-impact startups.
Unicoin.com, the official cryptocurrency of Unicorn Hunters, is backed by a portfolio of high-growth companies that provides its investors with dividends from their earnings. It is a disruptive scheme removed from FIAT money (highly susceptible to inflation) as gold backing, which is in limited supply. This model, backed by real assets, shows how viable it is in multiple formats. AvocadoCoin.com is betting on growth in the avocado industry as backing for its currency.
The cryptocurrency market needs regulation.
While it is impossible to predict what specific shape regulation will take, the crash marks the beginning of a new chapter. Rather than fear it, crypto ecosystem enthusiasts should welcome it and watch the whole movie before passing judgment. What is evident in the aftermath of the “crypto winter” is that digital currencies need to turn the page. Solid backing can only counter currency volatility regardless of the form or tone that new regulations may take. That’s why we are seeing a new generation of cryptocurrencies emerge that do not rely on perceived value – like traditional ones – but on real assets that generate value.
As Moe Vela, Former Sr. White House Advisor/Attorney and member of the Circle Of Money said referring to Unicoin: “What we have done with Unicoin is we have taken the best of what we thought worked in crypto fundamentally blockchain technology. We took the best of what worked in traditional investment platforms, the concept of an investment fund, and we brought them and married them.”
Regardless of the ups and downs of the economic situation, at Unicoin.com we firmly believe that the future of money is 100% digital, but also that it must be associated with wealth creation. We put innovation first and allow us to focus on all types of investors with the conviction that, with transparency and regulatory frameworks, the world will be able to generate wealth for everybody.
Find out how to join this new trend with Unicoin at Unicoin.com