## Are we on the brink of another crypto market crash?

Anyone following Bitcoin clearly remembers the 2017 craze when the strongest cryptocurrency reached a record of almost $20,000.

Sure, it was a fruitful year for most ICOs and wannabe entrepreneurs who wanted to get rich in no time. However, as it usually happens, the ICO bubble had to pop. At the beginning of 2018, the crypto market crash became inevitable.

In 2019, the CEO of Facebook, Mark Zuckerberg, announced that the biggest social network would enter the crypto space with its own project called Libra. Even though the idea sounded lucrative, many big names started backing out as the US Congress expressed concerns about the lack of regulation within the sector. The price of [Bitcoin](/coins/btc) then went down by more than 30%, below $10,000, followed by other cryptocurrencies. Analysts called it "a period of indecision," and investors hoped that Facebook's entry would bring greater legitimacy to the cryptospace. Even though Facebook changed its name to [Meta](https://about.facebook.com/) at the beginning of 2022, it doesn’t seem the social network affected crypto prices during the period to come.

## Fear of a Crypto Market Crash

Price changes usually depend on other circumstances such as recession, inflation, the geopolitical situation, pandemics, US regulatory actions, and so on. In 2020, Bitcoin jumped to a new record, following the government's stimulus packages to boost countries' economies during the COVID-19 pandemic.

Despite Bitcoin being on its way to becoming a hedge against inflation, it still isn't seen as a safe haven such as real estate or gold. That is why we are witnessing the price of Bitcoin moving along with the US dollar and the overall stock market.
We have often witnessed a situation when new short-term investors start to panic and decide to sell their holdings and, therefore, contribute to the drop in Bitcoin’s value. On the other hand, a crypto market crash can happen when so-called "whales" are involved. Holders with a significant amount of Bitcoin can temporarily affect Bitcoin's price if they make large buyings or sales.

## Crypto Market Crash Inevitable?

2022 started badly for Bitcoin and other cryptos even though the number one cryptocurrency was still 500% up since the end of 2019, primarily thanks to the US Government's COVID-19 stimulus.

The total market cap plunged by more than $300 million since the beginning of the year. This was chiefly due to record inflation and the Russia-Ukraine conflict, leading many investors to worry that a crypto market crash may be inevitable.
At the time of writing, Bitcoin stood at around $46,115 and headed towards a traditionally bullish April. The data shows that during the last six years, April was an extremely good month for crypto, as some speculate it's a psychological paradox connected to the spring optimism.

However, a seasonally bullish April could turn positive for Bitcoin even in the long term, together with stock markets.
The first all-spring month means most of the winter debts have been paid off, and buyers are in the mood to buy on a decline.

Still, there is a reason why a crypto market crash could soon be happening. US investors started to pull out of crypto, liquidating over $101 million worth of Bitcoin and approximately $151 million from Ethereum.
 
 



Crypto Market Crash: Bull April Suggests No Fear

In early May, Chief Executive Officer (CEO) of [Meta](https://about.facebook.com/meta/) Platform Inc. (NASDAQ: FB) Mark Zuckerberg announced that there would be the testing of integrating non-fungible tokens (NFTs) on Instagram beginning within weeks.

It came just days after Meta announced that the photo and video sharing platform, Instagram, will be supporting NFTs from Flow, Solana, Polygon, and [Ethereum](/coins/eth) blockchains.

Widely used cryptocurrency wallets MetaMask, TrustWallet, and Rainbow will be the go-to wallets for Instagram in its journey of supporting digital collectibles.

Zuckerberg pointed out that the building of NFTs is not only intended to draw the company to the metaverse, but to expand its non-fungible token ecosystem to Meta's family of applications.

He added that after the successful integration of NFTs on Instagram, Facebook would be next in line to enjoy this feature.

## Why is Instagram’s Integration with NFTs important? 

As of March 2022, there are more than one billion active users of Instagram. Although NFTs were first created in 2014 and became popular in 2021, millions of people still ask questions about what digital collectibles entail.

Several people have heard about the Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), CryptoPunks, Axie Infinity, NBA Top Shot, Meebits, Cool Cats, and CryptoKitties, but do not know how to get their hands on some of these collectibles.

Others have seen Beeple sell digital art for more than $69 million and could not wrap their head around such a news story.

Instagram NFTs will play an invaluable role in introducing billions of active platform users to several collections.

As of writing, popular NFT marketplaces known to stakeholders of digital collectibles include but are not limited to OpenSea, LooksRare, Rarible, and Nifty Gateway, among others.

The complexities of registering for a crypto wallet and using several digital currencies have not boded well for the adoption of NFTs by the mainstream.

With an Instagram NFT Marketplace, billions of users will trust Meta’s platform as one of the best NFT marketplaces to buy digital art.

One of the key areas you have to consider is the blockchains that Instagram NFTs will be integrating with.

As of May 2022, Ethereum is the [biggest NFT blockchain](https://cryptoslam.io/) by sales volume. Solana has surpassed Flow in terms of periodical NFT sales volume. Flow, the blockchain that holds NBA Top Shots, is in third place when sales volume is considered, and Polygon makes up the top 10 NFT blockchains by sales volume.

Should 100 million users on Instagram take a stake in digital collectibles, there could be an average of $100 million weekly sales volume from NFT art on Instagram alone.
This can contribute substantially to the more than $1 billion in volume recorded as total NFT sales weekly.

Finally, seeing NFT Instagram posts that entice people to buy using the three aforementioned crypto wallets bodes well for the adoption of digital wallets in the mainstream.

As of May 2022, TrustWallet had more than 5 million users, and MetaMask had more than 10 million active users. Although Rainbow wallet is relatively new, it continues to register new wallet addresses daily.

Instagram NFT Marketplace will see a minimum of 100 million users daily. This means that each crypto wallet can be projected to see five times the current number of users.

Once this happens, MetaMask might be soaring to around 50 million users, TrustWallet’s active users could reach 25 million, and Rainbow could see at least 10 million users in the long term.

## What next for Meta Platforms Inc. and NFTs? 

Aside from Instagram, WhatsApp, and Facebook are part of the Meta family. Per the words of Mark Zuckerberg, the success of Instagram NFTs will lead to the integration of Facebook into other NFT blockchains.

Once that is successful, there is a huge chance that WhatsApp could be next to join the non-fungible token (NFT) train.

As of writing, WhatsApp and Facebook have almost 5 billion daily active users.

With billions of people relying on Facebook ads to promote their products purchased by billions of people, NFT ads could be seeing the same reaction.

In the end, digital art from millions of developers could rake in billions of dollars in sales volume.

The resultant effect of this will be a positive reflection in cryptocurrencies backed by NFT projects.




	


Instagram to Start Testing NFTs in May

US lawmakers have urged Facebook boss Mark Zuckerberg to ditch his company’s cryptocurrency plans.

It was announced recently that Novi, a digital wallet, will enter a trial period in Guatemala, allowing cryptocurrency payments. Facebook is also reported to have revived plans to launch a cryptocurrency called Diem.

A letter signed by five Democratic Senators was sent to Zuckerberg outlining concerns about Facebook’s involvement in crypto, and demanding digital currency projects are discontinued.

The letter concludes: ‘Facebook cannot be trusted to manage a payment system or digital currency when its existing ability to manage risks and keep consumers safe has proven wholly insufficient.

## 'Immediately Discontinue Nivot Pilot'

‘We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to market.’

The letter from Brian Schatz (D-Hawai‘i), Senate Banking, Housing, and Urban Affairs Committee Chairman Sherrod Brown (D-Ohio), Richard Blumenthal (D-Conn.), Elizabeth Warren (D-Mass.), and Tina Smith (D-Minn.) reads: ‘We write to voice our strongest opposition to Facebook’s revived effort to launch a cryptocurrency and digital wallet, now branded “Diem” and “Novi,” respectively. In October 2019, Senators Schatz and Brown wrote to members of the Diem Association’s predecessor, the Libra Association, and expressed deep concerns about the risks the project posed to consumers and the financial system. Facebook subsequently shelved Libra amid regulatory scrutiny, but you did not address our concerns before resuming this endeavour.

‘On multiple occasions, Facebook has committed not to launch a digital currency absent federal financial regulators’ approval. In prepared remarks before the House Financial Services Committee in October 2019, you said that Facebook would “not be a part of launching the Libra payments system anywhere in the world unless all US regulators approve it.” More recently, David Marcus, the executive overseeing Facebook’s digital currency efforts, said, “\[w\]e are definitely not going to launch without the proper regulatory framework.”

‘Despite these assurances, Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a payments infrastructure network, even though these plans are incompatible with the actual financial regulatory landscape - not only for Diem specifically, but also for stablecoins in general. The agencies that oversee the US financial system are studying the risks that stablecoins pose to financial stability. Accordingly, they are considering how to address these inherent risks and clarify regulation and supervision of these products.’

## 'Facebook Cannot be Trusted'

It continues: ‘You have not offered a satisfactory explanation for how Diem will prevent illicit financial flows and other criminal activity. The intergovernmental Financial Action Task Force warned in a report to the G-20 finance ministers that stablecoins’ “propensity for mass-adoption makes them more vulnerable to be used by criminals and terrorists to launder their proceeds of crime and finance their terrorist activities.” The President’s Working Group on Financial Markets said in December 2020 that stablecoins “are likely to attract illicit actors and, without appropriate mitigation measures, allow evasion of key public policy objectives.”

‘Facebook cannot be trusted to manage a payment system or digital currency when its existing ability to manage risks and keep consumers safe has proven wholly insufficient. We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to market.’

[CNBC](https://www.cnbc.com/world/?region=world) carried responses issued on behalf of Facebook and Diem.

The broadcaster said Facebook claims to have already addressed many of the concerns raised by the senators. The social media giant had said that Novi and Facebook accounts are kept separately to ensure privacy and protection and added that the wallet was built to be completely secure.

## Privacy Top of Mind for Customers

The statement is reported to say: ‘We know privacy is top of mind for Novi customers, so it will always be top of mind for us. We prioritise the security and privacy of people’s information by encrypting sensitive financial information'. If we determine a transaction is unauthorised, we provide a full refund back to a person’s Novi balance. People’s Novi accounts and Facebook accounts are separate.’

CNBC added that Diem had highlighted it is not part of Facebook, which is just one of two dozen members of the Diem Association. The association is a network of ‘merchants, payment service providers, social impact partners, and other entities’ that are ‘dedicated to building a blockchain-based payment system that supports financial innovation, inclusion, and integrity’.

A statement carried by CNBC adds: ‘Diem welcomes the opportunity to engage with members of Congress on the robust controls we have spent two years building into our payment system.

‘Unfortunately, today's letter from lawmakers to Facebook misunderstands the relationship between Diem and Facebook. Diem is not Facebook. We are an independent organisation, and Facebook's Novi is just one of more than two dozen members of the Diem Association. Novi's pilot with Paxos is unrelated to Diem.’



Facebook Should 'Discontinue' Crypto Projects

Yesterday’s 24 hour outage of centralised service providers [Facebook](https://www.facebook.com/), WhatsApp and Instagram had many in the crypto space calling for the advent of Web 3.0 as fast as reasonably possible.

## What is Web 3.0?

But what exactly is Web 3.0, why is it relevant and how does it fit with blockchain, cryptocurrency and the decentralised economy?

Web 3.0 is essentially the next evolutionary step in the development of what we know commonly as ‘the internet.’ If web 1.0 was the message board era which only allowed one way interaction then Web 2.0 saw the advent of user led content and the inevitable rise of social media.

Web 3.0 can therefore be defined as ‘the machine based understanding and management of data in order to provide a user driven and semantic internet experience.’ Ok, that doesn’t sound like the most exciting raison d’etre I agree, however when you consider the aim of a web 3.0 based society is to create a more intelligent, connected and open internet it begins to make a little more sense.

## Web 2.0 vs Web 3.0

The essential difference between Web 2.0 and Web 3.0 is that in their third iteration websites and applications will be _written_ by artificial intelligence and machine learning in order to provide consumer led content in a style which is both personal and pleasing. This in turn will lead to the provision of a faster, more innovative and more personal end user experience.

Naturally, this new internet will be decentralised and will rely heavily on peer to peer led networks facilitating, among other things, the rise of new payment infrastructure, supply chains and unimaginable levels of personal security.

Centralised corporate giants such as Facebook, Twitter and YouTube have no choice but to adapt in order to survive as the internet once again returns to its customer driven and consumer led intended purpose.

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