The Dangers of the Upcoming Bull Run

TL;DR

• The Bitcoin halving is coming soon which means new money, new companies…and new failures.

• New money, new rules, and new vulnerabilities pose hidden risks in each bull run.

Full Story

The Bitcoin halving.

It’s like Christmas, for the crypto world!

If you’ve never experienced one before – the basic gist is this:

Every four years, Bitcoin mining rewards are cut – wait for it – in half.

And it has historically resulted in a few things:

1. An increase in BTC’s price over 18 months (like, a big increase)

2. Increased investment inflows to crypto projects

3. A huge uptick in new users across the board

It’s awesome! But it’s not without its risks…in fact, after next April’s halving we’re bound to see the collapse of at least a few projects.

Why would a project collapse during a bull run?

• Too much money.

  We know, we know. It makes no sense! But hear us out…

  During a bull run it’s often easy for investors (and founders) to convince themselves the growth and prosperity is never going to end.

  But it always does (what goes up, must come down).

  Projects that don’t put money aside to get them through the inevitable crypto winter will have a higher chance of going kaput.

• New rules.

  Over the past decade or so, the blockchain industry has been building in a field without any set regulations.

  That’s probably going to change soon.

  In fact, the European Union has begun setting tight regulations for crypto companies, while the US SEC has been on a war path. Projects will need to think about how they’re going to navigate the ever evolving global regulatory landscape.

  (Without getting sued into oblivion in the process).

• Security flaws.

  New money coming into the space, means more funding, means new crypto projects, means new vulnerabilities.

  With every new project, hackers are going to test for vulnerabilities. Inevitably they’ll find some, syphon off a bunch of money, and kill a few projects.

  It sucks. But it’s a reality.

Ok, we’re starting to feel like ‘The Grinch who stole Christmas The Bull Run,’ so we’re going to stop there.

But hey – now you know!