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Four lessons we can learn from the Bitcoin crash

Cryptocurrency isn’t dead yet, but its core credo now is to sustain life. The illusion that Bitcoin is an inflation fighter has disappeared. The first severe inflation since the 70s of the 20th century coincided with the fall of the bitcoin price by 60% over the past year. There is also no longer talk of bitcoin as “digital gold,” a precious metal that has far outperformed bitcoin, stocks and bonds this year, falling just 6%.

However, it would be a big mistake to interpret Bitcoin’s woes as a false argument for the entire cryptocurrency industry. Ethereum, the second-largest blockchain, has just undergone a major upgrade that could drive a renaissance in crypto activity. Companies supporting other blockchains remain committed to building new systems for financial products, payments, and digital assets.

Just as the internet survived the demise of Pets.com, the cryptocurrency collapse is not an epitaph for blockchain technology. In fact, scrape off the trash and what’s left is an industry worth revisiting. “In previous cryptocurrency cycles, your engagement was lower. In the new cycle, more people will use digital assets and build on top of blockchain,” said Alkesh Shah, cryptocurrency strategist at Bank of America.

Investors still need to remain vigilant. Dogecoin, an “influencer” token that started as a joke, still retains a market value of $8 billion, close to the market capitalization of companies such as American Airlines Group (AAL). Although the token market has lost $2 trillion in value, a large bubble still exists. “The durability of crypto assets is questionable,” said Eswar Prasad, a renowned digital asset expert and professor at Cornell University, “but the technology does seem to have some durability.” ”

If you’re considering investing in cryptocurrency, here are four lessons for you.

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