Crypto bubble

Some analysts are even hopeful that the current ‘crypto winter’ will freeze out those investors who were only interested in the market for short-term gains and leave room for visionaries in the field to flourish. Edith Yeung, a partner at Race Capital, recently told CNBC that she believes the long-term health of the crypto space is inextricably tied to an inevitable evolution of the internet to a ‘Web 3.0’ model. Bobbles crypto Between 2020 and 2021 saw another period of boom and crash after several rather inactive years. The Bitcoin price was around $6,500 at the end of March 2020, but it reached another all-time high of $63,109.7 on 14th April 2021—that was almost a 10 fold increase in a year or so. Then in the middle of the year, Bitcoin faced another steep slide, down to around $30,000. Unfortunately, other cryptocurrencies such as Ethereum also have followed pretty much the same pattern.

Bitcoin is no longer booming. In recent years, it seemed that the value of the world’s leading cryptocurrency could only go up, with the value of a single Bitcoin reaching a high of $68,000 in November 2021. Recent crosswinds in the global economy and a series of scandals, however, have brought that valuation crashing down to around $20,000 this month, along with confidence in the wider crypto ecosystem. As speculation grows about the long-term future for Bitcoin and its rivals, Tech Monitor asks whether the crypto bubble has burst – and what’s next for this once-promising sector. As cryptocurrency bubbles are largely characterized by cryptocurrency co-movements rather than herding, analyzing cryptocurrency-specific factors that can predict the occurrence of bubbles in each cryptocurrency is vital. Thus, we apply the probit model to identify factors behind cryptocurrency bubbles. We employ panel model estimation with all cryptocurrencies and estimations of time-series models for each cryptocurrency separately.