The Many Deaths of Bitcoin: Has the Crypto Market Passed the Point of No Return?

Bitcoin has been declared dead more times than you can imagine during market downturns, but it always manages to bounce back.

Bitcoin and the broader crypto market have been gleefully declared dead multiple times during the bear market, but some experts say it will take a truly extreme series of events for it to truly die.

According to 99Bitcoins, a website that, among other things, tracks the number of times mainstream media have declared Bitcoin ($42,193) dead, the largest cryptocurrency by market cap has died 474 times since 2010.

Normally, this announcement would be cheered by cryptocurrency skeptics as proof that BTC is not a viable asset, but destroying cryptocurrency might not be that easy — at least according to some experts in the field.

One year ago #Bitcoin hit $69,000. One of the main reasons for this amazing rally was all the leverage that financed unprecedented #crypto advertising and speculative buying. #FTX bankruptcy proves the entire rally was a scam. It will never be repeated. The Bitcoin mania is over.

— Peter Schiff (@PeterSchiff) November 11, 2022

BNB Chain head of business development Tomasz Wojewoda believes it will take more than just a bear market or crypto winter to end BTC and the cryptocurrency market, which has experienced a particularly severe downturn since its 2021 all-time highs.

A bear market is when the value of a cryptocurrency drops by at least 20% and continues to fall, while a crypto winter is a period of prolonged low asset prices in the market.

Wojewoda told Cointelegraph that in his opinion, the only way for BTC and the broader cryptocurrency market to die is if an extreme scenario occurs, such as the base community losing interest and everyone exiting the space at once.

However, he doesn’t think that will happen anytime soon. Regardless of the FTX saga and other drama in the space, Wojewoda believes that “the demand for cryptocurrencies will always be there.”

“The cryptocurrency market, like any market in the economy, will fluctuate and trend up or down based on sentiment,” he said. “The market has gone through multiple bear markets, but historically we have seen the market recover from similar trends.”

There have been huge spikes in the value of cryptocurrencies, only to collapse, in 2011, 2013, 2017, and 2021. So far, each crash has been followed by a recovery in prices a few years later.

This bear market and crypto winter in general has been particularly brutal. After reaching a high of over $69,000 in 2021, Bitcoin lost more than 60% of its value in 2022, according to Coingecko. As of 2023, Bitcoin has recovered somewhat, but is still down about 40% from its all-time high.

Wojewoda said challenging times like these are “actually positive for the industry” rather than a sign that crypto is dying, even though it might look like that. Specifically, he believes market crashes can help weed out bad actors.

He also believes this is a period of "strong projects focused on building and improving the user experience."

Regulation Won’t Kill Cryptocurrency

Bank regulators appear to be trying to stifle or dismantle the cryptocurrency industry, launching a series of lawsuits and a daunting array of regulations that some fear could spell doom for the sector.

The SEC, led by Chairman Gary Gensler, has been particularly aggressive toward cryptocurrency companies. Gensler said his agency has filed more than 780 enforcement actions in 2023, including more than 500 separate cases.

1/ Today Coinbase received a Wells Notice from the SEC focusing on staking and asset listings. Wells Notices often precede enforcement actions.

— Brian Armstrong️ (@brian_armstrong) March 22, 2023

Cryptocurrencies and Bitcoin have survived, though. Regulations have been slow to come and, in some cases, poorly crafted. Wojewoda believes that some form of regulation will ultimately be a good thing for the industry, rather than the cause of its demise.

“Global regulation may affect the growth of cryptocurrencies; however, as more countries around the world accept cryptocurrencies, I don’t think it will be the reason for the ‘demise’ of cryptocurrencies,” he said.

“Industry regulation is a good thing. It keeps users safe, and a clear framework enables the industry to build around it.”

Some cryptocurrencies may die, but the industry will survive

Wojewoda believes that the cryptocurrency market will make it to the other side of this crypto winter and beyond. He thinks it may survive as a concept, but not all projects and currencies will make it to the long term.

According to Exploding Topics, there are over 10,500 different cryptocurrencies in existence as of November 2023. However, it is estimated that only 8,848 are still active in the space, with the rest fading or dying.

“Projects without real use cases die, but projects that really make an impact not only survive, but thrive,” Wojevoda said.

“There are many factors that will influence the trajectory of cryptocurrencies, such as sentiment, regulation, and other factors such as Bitcoin ETF applications and the upcoming Bitcoin halving,” he added.

New research note I wrote today. We still believe there is a 90% chance of a #Bitcoin ETF spot approval by Jan 10th. But if it comes sooner, we'll be entering a window where all current applicants *might* see a wave of approvals pic.twitter.com/u6dBva1ytD

— James Seyfart (@JSeyff) November 8, 2023

In the long term, as the weaker players exit, Wojewoda believes it is “not impossible” that some cryptocurrencies will be replaced by new, better technologies.

He believes Bitcoin will not be a victim because its network effects and user base give it a significant advantage over other cryptocurrencies.

"Bitcoin will probably remain the most popular cryptocurrency in terms of market share. I think we may see more changes in the rankings for cryptocurrencies that offer real-world applications," Wojewoda said.

“These projects have applications beyond digital currencies, and the technology is constantly evolving to find new use cases and applications for the real world.”

These applications are one of the reasons why Wojewoda believes the market will persist in the long term. While not all will succeed, the broader crypto market and Bitcoin will survive.

Market will rebound, BTC remains strong

Markus Thielen, head of research and strategy at digital asset investment firm Matrixport, also expressed doubts that a bear market or crypto winter poses a real threat to the cryptocurrency market and BTC.

Thielen told Cointelegraph in an interview that while many people exit the space during the bear market, this is a normal part of the process and not a sign of cryptocurrency’s impending demise.

“Last year, many people were excited about the crypto sector because these companies were expanding near the top of the last bull run,” he said.

“Without sufficient revenue and additional funding from venture capital funds, these cryptocurrency companies will have to resize their companies.”

Rightsizing is the process of restructuring a company in order to more efficiently earn profits and meet updated business objectives. Rightsizing often involves reducing the workforce, changing top management, and other cost-cutting measures.

“As long as value is transferred electronically, cryptocurrencies have a value proposition that is difficult to match with traditional banking rails,” Thielen added.

So far, there have been four bull runs -- in 2011, 2013, 2017 and 2021 -- and each time record numbers of people entered the space only to disappear when a bear market set in. Bull markets are characterized by rising prices and investor optimism.

Thielen believes that each bull run is built on a new narrative and that this will continue. He said that another narrative for the fifth bull run will soon emerge.

“The playing field at the regulatory level has solidified with regulators approving bitcoin futures in 2017 and potentially approving a bitcoin ETF in 2024,” Thielen said.

“I can’t imagine Bitcoin disappearing because the idea of ​​Bitcoin fell into the hands of human fallacy.”