Sirwin
Sirwin

Let's Separate the Crypto Industry From the Tokens Themselves


The idea for this post originated from a message I saw posted Stocktwits. It was something along the lines of "Coinbase is laying off more employees; this is it for Bitcoin." The post was accompanied with the BEARISH stamp, with $BTC tagged. It's true, Coinbase is indeed letting go of about 950 employees, or 20% of its workforce. But I don't believe, for one second, that the decline in success of crypto industry companies translates to the decline of the price of tokens themselves. Let me explain.

I view the "crypto industry" as the hundreds (if not thousands) of companies that generate revenue indirectly from cryptocurrencies.

This includes exchanges, who profit from spreads on crypto trading, transaction fees for crypto trading. Companies like:

  • Coinbase
  • Crypto.com
  • Gemini
  • BitMart Exchange
  • Kraken
  • eToro

Crypto mining companies generate revenue from the mining of cryptocurrencies:

  • Canaan Inc.
  • Hut 8 Mining Corp.
  • HIVE Blockchain Technologies
  • Marathon Digital Holdings
  • Riot Blockchain

Crypto ATM operators make money from transaction fees:

  • Bitcoin Depot
  • Coin Cloud
  • CoinFlip
  • Bitcoin of America

There has been a lot of negative news on these companies lately. A big risk these companies take on is holding actual crypto tokens on their balance sheets. For when the price of crypto tanks, a given company's reserves quickly shrink. Mining companies have taken a hit this past year, due to rising energy costs and high debt from expanded borrowing in 2021. Coinbase, which is consistently the second most popular exchange by trading volume, has lost 87% of its market value since its direct listing in April 2021.

5401858eec34cbc63b98609b5ffa97ef09d76612a35cb1d83f40b34757860cd1.png

It doesn't take an expert to realize that a lot of these crypto companies won't survive. Many have already filed for bankruptcy:

  • Three Arrows Capital
  • Alameda Research/FTX
  • Voyager Digital
  • BlockFi
  • Celsius

Whether or not the above companies will successfully emerge from these bankruptcies remains to be seen. There are still definitely tough times ahead for the crypto industry. The fact that the prices of major tokens are still depressed does not help them. But, whether or not these companies survive the "crypto winter" is really quite irrelevant for the tokens themselves. The all-time chart of Bitcoin is still bullish, despite being down from its all-time high.

7b9cb2df8ce75df74dc61269912c71d1626668727944a4fd8f2af043eb709e1c.png

The previous peaks in 2018 and 2019 were followed by consolidation periods, or "crashes" as they were referred to as they were happening. It appears that Bitcoin is in just that now, another period of consolidation.

Another important factor to consider is the upcoming Bitcoin Halving, which is forecasted to occur in March 2024. Halving happens every 210,000 blocks in the blockchain, when the reward for miners is cut in half. The next halving will drop the mining reward from 6.25 BTC per block to 3.125 BTC per block. The Bitcoin Halving Clock explains quite well the history of price action at these events:

3b47fc75ed27aa4d6fc53aea133c2f5e197e66c3e0f2050ddf78642f9e03560b.png

In conclusion, I would like to take the time to mention a few crypto companies that have gone defunct, one by scandal and one by hack & list the price of Bitcoin when they went down, compared to now.

Quadriga

  • Defunct February 5, 2019
  • Bitcoin closed at $3,466.36
  • Current price is +402% since 2/5/19

Mt. Gox

  • Halted operations February 7, 2014
  • Bitcoin closed at $712.40
  • Current price is +2,345% since 2/7/14

While certainly necessary for the world of cryptocurrencies, specific companies come and go. I don't believe that the ultimate success of any particular token, if measured by price, depends of how any particular company fairs. Let me go ahead and list one final company here that is fresh in everyone's mind.

FTX

  • Bankruptcy/withdrawals halted November 11, 2022
  • Bitcoin closed at $17,055.93
  • Current price is +2% since 11/11/22

The original Bitcoin faucet is long gone, but there are still ways to collect some free crypto:
  • Sign up here on Publish0x, if you haven't already, to earn free crypto for reading & writing content.
  • Join Cointiply and roll the faucet every hour, view PTC ads, take surveys to earn free Bitcoin, Litecoin, Dogecoin, or Dash.
  • Make an account at read.cash and earn Bitcoin Cash (BCH) tips for writing short posts or full articles.
  • Downoad the Bitcoin Cash Giveaway to collect some free BCH sats, paid out weekly.
  • Check out Yescoiner to easily collect some satoshis; no nonsense -- just solve a captcha. Low payout, slow drip here.

How do you rate this article?

55


RocketEnthusiast
RocketEnthusiast Verified Member

dot com boomer - writing mostly on crypto, stocks, entertainment, etc.


Esoteric Selections
Esoteric Selections

From the deep reaches of the inner mind, to the lighthearted musings of a friendly conversation, to investing and crypto ramblings, to reflections on pop culture phenomenona: assorted subjects and scattered connections.

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.