The Failing Altcoins! Why Bitcoin Killers are Dying Amid Crisis

Despite the price swings, most of the Altcoins are in a ‘life or death’ situation

The ongo­ing war between Rus­sia and Ukraine has led to mas­sive changes across the finan­cial ecosys­tem. One thing that is play­ing a big role amidst the cri­sis is ‘cryp­tocur­ren­cy’. In the past week, cryp­tocur­ren­cies like Bit­coin and Ethereum have lost val­ue and gained them back in a mat­ter of days. How­ev­er, despite the price swings, most of the alt­coins are in a ‘life or death’ sit­u­a­tion. Bit­coin killers that emerged out of the blue after ‘cryp­tocur­ren­cies’ became a buzz­word are now look­ing for a last resort where they take shel­ter to sus­tain the geopo­lit­i­cal blows.

When Russ­ian Pres­i­dent Vladimir Putin announced a ‘mil­i­tary oper­a­tion’ a few days back, Bit­coin went to as low as US$35,082.66 and Ethereum fell to US$2,350.25. All oth­er major alt­coins also faced the blow. How­ev­er, the geopo­lit­i­cal sit­u­a­tion took a dif­fer­ent turn when Rus­sia start­ed using dig­i­tal tokens as a tool to evade US sanc­tions. On the oth­er hand, Ukraine, the befall­en coun­try from the Russ­ian inva­sion, is col­lect­ing funds in form of Bit­coin and Ethereum to sup­port its cit­i­zens. Accord­ing to reports, the Ukrain­ian gov­ern­ment is using cryp­tocur­ren­cy crowd­fund­ing to pro­vide basic ser­vices to its peo­ple. These major hap­pen­ings have changed the tail­wind of many dig­i­tal tokens. How­ev­er, despite the ongo­ing price swings and uncer­tain­ty, alt­coins are emerg­ing as the biggest losers. Many poten­tial Bit­coin killers are now per­form­ing under ques­tion­able cir­cum­stances. There­fore, we see where these alt­coins could move for­ward from here. Can they real­ly sus­tain the blow or will they become one of the many cryp­tocur­ren­cies that have dis­ap­peared in thin air?

Can Cryptocurrencies Really Die?

Yes, the so-called ‘dead coins’ or ‘Cryp­to Grave­yard’ real­ly exists. But how come cryp­tocur­ren­cies end in a grave­yard? Let’s start by explor­ing the basics. Gen­er­al­ly, when either a devel­op­er aban­dons a project or its trad­ing vol­ume drops below US$1,000 for more than three months in a row, cryp­tocur­ren­cy death hap­pens. But both these things hap­pen when cryp­tocur­ren­cies are cre­at­ed with­out a strong plan in mind. When the cir­cum­stance changes, the nature of dig­i­tal tokens can’t change. How­ev­er, they can’t com­ply with geopo­lit­i­cal blows like the one going on in Ukraine. That is when they fail to com­ply with the mar­ket sce­nario and sus­tain the sit­u­a­tion. Par­tic­u­lar­ly, alt­coins fall vic­tim to this cir­cum­stance very often because some of them are built with a frag­ile motive.

On the oth­er hand, we also have cryp­to scams that are tak­ing a toll on investors’ mon­ey. OneCoin scam remains the largest to date and prob­a­bly taught traders a lot of val­ue able lessons. The cryp­tocur­ren­cy gained pop­u­lar­i­ty between 2014 and 2016. The plat­form that act­ed as the only source to cash out OneCoin was shit down in 2017, result­ing in investors los­ing US$4 billion.

The Increasing Number of Altcoins’ Failure

Most of the alt­coins try to fol­low the foot­steps of Bit­coin. The devel­op­ers try to imi­tate the nature of BTC or some­times Ethereum. But tru­ly, a lot of them couldn’t even active 50% of what Bit­coin and Ethereum have done so far. They dis­ap­pear in thin air due to a lack of long-term via­bil­i­ty. As of May 2021, over 2,000 cryp­tocur­ren­cies have failed and a lot more fail­ures are yet to be discovered.

Accord­ing to some experts, the cryp­tocur­ren­cy mar­ket might com­plete­ly dis­ap­pear in a decade or two. They com­pare it with the 1990s dot­com bub­ble that went bust at the time. But one thing that makes Alt­coins the first vic­tim of changes is their non-planned nature. The cryp­to devel­op­ers don’t spend enough time design­ing a busi­ness use case for their tokens and coins. They just launch their idea of coins with­out con­sid­er­ing the eco­nom­ic and geopo­lit­i­cal changes.

Geopolitical Concerns Taking a Toll on Altcoins

The Rus­sia-Ukraine war is not the first time geopo­lit­i­cal changes took Alt­coins as vic­tims. It has hap­pened ear­li­er also when there was ongo­ing civ­il unrest and increas­ing eco­nom­ic strug­gles in Turkey. But now, the sit­u­a­tion is even worse for the poten­tial Bit­coin killers because the cryp­tocur­ren­cy mar­ket has gained more dom­i­nance than ever before. There­fore, just like the stock mar­ket and NIFTY, cryp­tocur­ren­cies includ­ing Bit­coin and Ethereum, and oth­er alt­coins are expe­ri­enc­ing a val­ue decrease.

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