Illustration: Sarah Grillo/Axios
When reading the latest obituaries for blockchain and cryptocurrencies, it helps to remember they’ve been written before.
The big picture: There have been many crypto booms and busts. But in each bust, the bottom is a little higher than it was the time before. This is the slow build that believers count on to eventually bring crypto mainstream.
- There are people all over the world committed to cryptocurrency’s endurance, with hundreds of billions of dollars in value still deployed across many blockchains.
Driving the news: The collapse of FTX is only the latest headline-grabbing failure to rattle the crypto market this year. May’s collapse of the Terra stablecoin really kicked off the present downturn.
Flashback: There were bitcoin booms in 2011, 2013, 2017 and 2021. The last three have all received wide mainstream attention, and obituaries similar to today’s were written after every previous cycle.
- They were all premature.
- One school of thought suggests that whenever a market crash hits the front pages of mainstream media (like FTX and crypto have), the trend is over.
Of note: Today, more machine power is mining bitcoin and securing the network than any other boom time in crypto’s history.
- In fact, machine power has grown all through 2022, committing more resources to bitcoin despite the market crash. That’s persisted even amid China kicking miners out, environmental controversies, and supply chain issues everywhere.
- If the industry were dying, these miners should be winding down. They aren’t.
By the numbers: Global demand for bitcoin right now is roughly equal to a level that, just few years ago, was only attained in an atmosphere of irrational exuberance.
- Lately, bitcoin’s price has been hovering just under $17,000. But even after losing 2/3s of its value earlier this year, it was still above its 2017 high.
Bitcoin price isn’t just a number: It’s a measure of how much the world wants a thing. After each boom and bust, there are more people who want crypto than there were in the last bust. This keeps happening, and appears to be happening again.
What we’re watching: Bitcoin’s price could still go much lower, but unless prices get stuck below 2018’s levels, the digital coin is likely to come roaring back eventually, just as it has each time before.