Bitcoin Bullhorn Erik Voorhees Justifies Ongoing Crypto Bear Markets, Encourages Ecosystem Building
Erik Voorhees, the CEO of the ShapeShift digital currency exchange, believes that the current bearish trend regarding the value of Bitcoin is fundamental to the construction of the market's foundation and infrastructure. Precisely, Erik stated that only the fickle investors are insecure about the plummeting prices of Bitcoin, while builders are preparing and developing the market for future purposes.
In the past eight years, there have been eight corrections on the Bitcoin network. However, this year's correction resulted in a 67% drop, the smallest correct with regard to percentage loss since 2010. At the tail end of 2017, specifically in November and December, the price of Bitcoin soared considerably as a result of the hype generated by mainstream media outlets, creating a substantial amount of speculation and interest around digital currencies. In South Korea, the coin’s price hit a record $24,000 as a result of the ‘Kimchi Premium.’
For investors who have been dealing with Bitcoin since its early days, the recent correction is a normal occurrence, socially given that the other four corrections are usually above 80%. On the other hand, new investors who invested the entirety of their life savings or borrowed loans with a hope of getting rich via Bitcoin trading are lamenting due to the heavy losses they have incurred.
Despite the adverse impacts of the ongoing bear markets, Voorhees and Coinbase’s CEO Balaji Srinivasan have maintained that the correction was necessary to allow developers and leading institutions within the sector can construct an infrastructure that is capable of handling future demands. Late last year, Bitcoin and Ethereum networks were overwhelmed by the increased demand that resulted in the increase of transaction fees from $5 to $30. Consequently, volatility of the markets ensued due to the unprecedented influx of capital.
If the demand had continued at the same rate in 2018, it is obvious that blockchain networks would have capitulated. Srinivasan likened last year's scenario to 2011 when a cryptocurrency bubble emerged and plummeted within a relatively short period. According to him, the market crashes are meant to build the blockchain infrastructure so that they can handle the ever-growing demand.
The bullish market trends in 2017 were mostly influenced by individual investors and retail traders, with institutional investors keeping off the market. This is set to change this year, as leading corporate firms are expected to contribute to the market. Also, Bitcoin and Ethereum have improved the scalability of their networks in preparation for the next wave of demand.