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While some members of the crypto community can’t look at the current prices without pain, some others do not lose hope and belief in the bright future. Moreover, some experts also ask us to keep calm and their position is not deprived of arguments.
Wilson’s Point of View
One of those who is not panicking looking at the current market conditions, is Fred Wilson, a prominent venture capitalist. According to him, the things can get even worse in the short-term, cryptocurrencies have all chances to go down even more.
Nevertheless, Wilson strongly believes that it is not a reason to leave the market. The most patient investors will get their reward.
In his blog post he explained his position the following way:
“So while crypto asset prices are down 80-95% in USD terms over the last year, they could and probably will go lower. Amazon was down 80% a year into the post-bubble bear market and it got cut in half again before it made a bottom almost two years after it peaked. What we have yet to see in crypto land is when they kick you when you are down. And that is certainly coming.”
Amazon’s Case
At the current moment, Amazon is known as the world’s second-largest technology conglomerate. Its stocks are traded for $1,500 per unit. But less than 17 years ago, to become its stockholder it was enough to pay just $6. It means that those investors who were not afraid to buy Amazon stocks in 2001 have got a 250-fold reward.
Nevertheless, in 1999, two years earlier, when Amazon peaked in the Internet bubble, its stock achieved the $90 mark. Then it declined to 6$ just in 2 years but it took more than 8 years to reach $90 once again in 2007.
According to Wilson, the cryptocurrency sector has experienced several serious corrections in its history just like Amazon has. Moreover, it is too early to speak about possible stabilization of the situation. As it is still a very young asset class, some further bubble-burst-build-rally cycles are inevitable in the near future.
Overall Market Situation
Last year we observed an enormous hype around cryptocurrencies, the market was growing and expanding so rapidly that it was difficult to believe that it was a reality. Nevertheless, 2018 is not a very successful year for crypto.
Almost all cryptocurrencies have lost a significant part of their value this year. For example, the market cap of Bitcoin has dropped from more than $230 billion to $68 billion and the market cap of Ethereum has fallen from $120 billion at the beginning of the year to $12 billion.
At the current moment, it is difficult to say whether the current bearish trend will last long, nevertheless, Fred Wilson says that now is a perfect time to buy cryptocurrencies with a view to be rewarded in the future
