Tge Great Depression, which began with the stock market crash of 1929, was one of the most significant economic crises in history. Today, nearly a century later, the cryptocurrency market is showing similar signs of a systemic crisis. Many of the factors that triggered the economic collapse back then are repeating in the modern crypto industry, giving rise to what can be called the "Great Crypto Depression."
Market Overheating and Speculation
In the 1920s, the U.S. stock market overheated due to massive speculation, fueled by credit. People were investing heavily, often without understanding the true value of the assets. A similar situation is unfolding in the cryptocurrency world: numerous new tokens are being launched on exchanges, but their value either doesn't grow or experiences only short-term spikes.
On the OKX exchange, no new tokens have shown sustainable growth over the past two years. Bitcoinâthe largest cryptocurrencyâis simply moving sideways, fluctuating within the highs of the previous bull run, without demonstrating significant growth. This suggests a market overheating, where investor expectations far exceed the real value of the assets, much like what happened in the 1920s.
Lack of Real Value and Futures Speculation
One of the key causes of the 1929 crisis was the lack of real value behind many companies whose stocks were overvalued. In the cryptocurrency world, something similar is happening: small investors continue to pour money into futures, temporarily supporting asset prices but failing to strengthen their fundamental value. These short-term speculations increase market volatility, creating the illusion of activity while the real value of assets declines.
The actual losses suffered by small investors, who lose money in futures trading, benefit large players but exacerbate the overall market crisis. As a result, cryptocurrencies are losing their appeal, reflected in falling prices and widespread disappointment.
The Gap Between the Information Landscape and Reality
One of the key factors intensifying the sense of a crypto depression is the enormous gap between the information landscape and reality. In 2024, all media and social networks are flooded with predictions of an upcoming bull run, with promises further stoked by high-profile figures like Donald Trump and institutional players such as BlackRock. It would seem logical to assume that such a wave of positive news should drive market growth, as more and more people invest in cryptocurrencies, building their portfolios. However, in practice, this is not happening.
Bitcoin, despite all the hype, continues to "move sideways," meaning its price is not showing significant growth despite constant predictions of an imminent rise. If such a powerful media push is unable to lift the price, what can be expected from future events? This raises legitimate doubts about the realism of dreams for a bull run in 2025-2026. Many investors are beginning to realize that the market remains in a state of depression, and any promises of future growth may be nothing more than a farce.
Excessive Expectations and Prolonged Depression
Just as during the Great Depression, when expectations of a mass economic recovery proved futile, the cryptocurrency market may remain in a state of depression for many years. Despite the grand announcements and promises, the industry's fundamental problems remain unsolved. Many investors believe that a bull run will occur in the next two years, but current trends suggest otherwise.
Additionally, the romanticism around cryptocurrencies as the "currency of the future" is becoming less and less justified. The adoption of blockchain and crypto assets in everyday life is not happening at the pace many enthusiasts anticipated. And cryptocurrencies, having lost their fundamental value, are becoming the object of short-term speculation rather than long-term investments.
Conclusion
The cryptocurrency market, like the stock market in 1929, is experiencing its own "Great Depression." Overheating, speculation, lack of real asset value, and the gap between the media narrative and reality point to deep-rooted problems that could lead to a prolonged crisis. If no drastic changes occur in the near future, the cryptocurrency market could remain in a state of depression for a long time, while dreams of a new bull run will only increase disappointment among investors.
