The cryptocurrency community is asking a question that demands an answer: how can we possibly convince someone to trade or invest in cryptocurrencies when 50% of their value can be wiped out in a single day?

Yesterday was, by any account, a bloodbath for the market. Stocks officially went into bear territory and the entire cryptocurrency sector posted one of its worst daily losses ever. The numbers were nothing short of staggering with most cryptocurrencies seeing a 50% drop across the board.

The ‘store of value’ argument for Bitcoin has been severely questioned in light of this market drop. Some of Ethereum’s top addresses have dumped their holdings. Cryptocurrency exchanges are struggling to keep up given this volatility and are outright ignoring concerns. So, it may be time to do some soul searching.

The Cryptocurrency Community Discussion

Loomer (@loomdart) sparked a conversation on crypto-Twitter that got the entire space talking. Although we are still processing the record drop yesterday, it’s probably time to put the industry and the market in perspective.

The response to the tweet was largely jokes intended to lighten the situation which, realistically, is quite serious.

Others pointed out that there was profit to be made during the recent drop. Bitcoin did, in fact, go below $4,000 and is now trading for around $5,500 or so. However, catching that bounce is hard, and it’s a bad way to convince anyone to want to trade cryptocurrencies. At that point, it’s more comparable to outright gambling than rational trading.

The Bottom Line

It’s hard to make a case for cryptocurrencies when it can wipe out almost all its value in just 24H. People may say that this is a once-in-a-lifetime event, but regular stock markets have circuit breakers. The cryptocurrency market, by contrast, runs 24-7 and has no brakes. This means it can crash and crumble gains accumulated over months in just a matter of hours.

This has caused some to call for circuit breakers on exchanges. However, it’s hard to imagine how this would be enforced. It’s an idea worth considering, though.

The stock market is now officially in bear market territory as of yesterday and a recession looms large on the minds of most people. There’s no indication that this will be slowing down anytime soon with the ongoing oil price war and coronavirus still spreading rapidly. If you are feeling especially brave, catch the falling knife.