Unpopular opinion: Why the collapse of the Celsius project is good for the crypto market

Previously, we have already talked with Alex about the situation in the cryptocurrency market. Somewhat unexpectedly, he said the collapse was right for the market and good for its future.

Today we spoke with Alex again and asked him to explain why this is so on Celsius’s example. Crypto lender Celsius has begun filing for Chapter 11 bankruptcy protection. A month ago, after the collapse of the crypto market, the company froze client accounts and joined the list of crypto bankrupts.

What does the fall of Celsius mean for the market?

Now everyone is talking about the collapse of the CEL token’s price and the Celsius project’s failure. The project, which seemed pretty reliable to many, burned $350 million worth of client assets to make money.

Project investors lost large sums. The situation is terrible for them. But for the market, it was expected. And normal. The crypto industry is a very young field. It is constantly shaking. And now it’s all gone down the drain. Even the strong projects continue to lose value.

For the market as a whole, this is good. For two reasons:

• The fall period is a test of strength. At these moments, weak projects go out of the game. After the crisis, more reliable, stable players remain on the market. People trust them more and more. Confidence in the industry as a whole is growing.
• Such financial cataclysms of the industry will bring many new investors to the crypt. These people will want to buy Bitcoin and other coins at historical lows. This will definitely lead to a reboot. The market will begin to grow, which will lead to even greater performance in the future. We may still see Bitcoin at $100,000.

I think the CEL collapse is not the last show of the season, so brace yourselves. I expect crypto drama from many bright projects on the market this season. And I also expect revivals of the projects that have been dead and buried for a long time.

But what about the investors who lost money?

Of course, this is painful for many investors, especially beginners. They lose money, and they get frustrated. The fact is that many of them were guided by emotions when they invested in the project. And that’s a bad strategy.

There is also good news. After a few losing trades, investors usually stop being guided by emotions. And they begin to act on the basis of their knowledge and experience.

For a sensible investor, a falling market is an opportunity to increase their portfolio.

For a noob, it’s another opportunity to lose money. There are many reasons, but the essence is the same, you cannot expect longevity from hype projects.

What should investors do in order not to lose everything

There is only one way to be safe from losing money — to divide your capital.

This is an ironclad rule — in no case should you invest all your money in one project.

The market is always manipulated by whales (people who own huge amounts of certain coins). Even Bitcoin can be discredited at some point. After all, people always break any scenarios set by any project developers.

Therefore, returning to the topic of CEL, its fate will be decided by the project community. If they believe in it, Celsius may well stand. Or be reborn.