Back in Q4 of 2017, the crypto market suddenly received a lot of interest due to several reasons. They gained more exposure, which led to an increase in value, which in turn brought even more exposure. Simultaneously, ICOs became popular as well, and most investors started buying cryptocurrencies such as Bitcoin and Ethereum in order to exchange them for different new tokens.
In other words, Bitcoin and Ethereum themselves were not the coins people wanted to own. Many were actually interested in a number of new coins which could only be obtained via BTC and ETH. However, those who did want to own BTC and ETH — did not want to sell. This created a demand for these two coins, and their value started growing.
Meanwhile, the companies that held ICOs became whales, and they started unloading their coins in December 2017 and January 2018. After the new year started, startups needed to exchange their coins for traditional currencies in order to be able to pay their developers and help their own companies grow further.
The oversale led to the crash of the market, which resulted in a near-total halt of ICOs in 2018. Due to falling prices of crypto, people did not want to invest in new coins, so startups stopped offering them. Those who did offer new coins started accepting fiat currencies for them, and Bitcoin and Ethereum were no longer the only way of obtaining new tokens. As a result, their prices dropped even further,
The market is still dominated by Bitcoin, and this single coin is capable of affecting nearly every other cryptocurrency, including Ethereum. All of their prices go up and down in a perfect correlation. The market should not act this way, but it has no choice due to the lack of regulations and centralization which would keep things in check. However, things are not one-sided as they appear, and as BTC behavior can alter the price of other tokens, the opposite is also true.
The shift in ICO trend
Then, in 2018, something else started happening. Investors started realizing that most ICOs did not have tech experts working on them and that most of these new tokens are not something they wish to invest into. And, while BTC and ETH price increase allowed other coins to grow in value due to extreme price correlation, the drop is affecting the entire market in exactly the same way. In other words, the coins are not as independent as investors would want them to be, and they all grow and drop at the same time.
This is a bad situation even for the established coins, but it is much worse for weak startups that are just starting to appear. However, this can also serve as a filter that will take away weak coins, with only the best ones being able to survive. With less money for random investments, not any ICO can survive anymore, and investors are not willing to gamble by throwing cash at every new ICO as they did in late 2017.
Another thing that has changed is the amount of involvement from institutional investors. While still not ready to go all in, institutions are developing more and more interest in crypto, and they are now believed to be investing more than retail investors. Institutions can also bring a lot more money to the crypto market, but they will not invest in any project. Due to the fact that these are professional investors, they will seek out only the best investments.
While they will want to have their investment portfolios as diversified as possible, they will also aim to have the best risk management. This does not only include tokens but equity as well. All investments will come only after proper research is done, and institutions can ensure that the project is worth investing in. Such way of conducting things will also see a return to traditional market valuation.
As a result, it is expected that startups in 2019 and the following years will be better on average than the ones launched in 2017, which will influence the market’s stability in a positive way. Furthermore, the population of management teams is expected to evolve due to the fact that professional developers are now entering the blockchain industry.
Rooting out bad projects in the crypto market
When it comes to old cryptocurrencies. Bitcoin itself has proved on numerous occasions that it is resilient enough to survive even the harshest conditions. It has already been through numerous surges and crashes, not to mention events such as Mt. Gox hack. In the long term, Bitcoin will likely continue to rise, and after the market gets cleared of weak projects and scams, it will become more robust.
In other words, bad projects will likely run out of money and be forced to shut down due to their coins being worthless, while the crypto itself will survive for long enough to see prosperous times once more. The process can only be completed through weakening the market, which is the situation that is happening right now.
After the correction, a few killer startups are expected to emerge, and these will likely be the one that will lead crypto towards real mass adoption. As a direct result of bringing more crypto users and investors to the market, the value will grow, and surviving coins will likely reach new all-time highs. The token adoption will likely start through a video game sensation, perhaps a crypto-equivalent to Angry Birds. Other projects that will start implementing crypto in new, imaginative ways will appear as well, and the process will continue.
And, as blockchain itself continues to develop and bring decentralization, transparency, and data security into the business world, blockchain adoption itself will follow as well. Considering the vast use cases of the blockchain, and its potential to eliminate scams and data manipulation, this might happen relatively soon, with more and more industries switching to this technology.
All in all, many experts see the current price decline — and the entire year of 2018 — as an experiment with crypto. It had its good sides, such as showing the limits, as well as potentials, of this technology, and also raising awareness of it. After the initial hype dies down, this technology will finally be able to develop properly, with major players joining in.
As a result, the next couple of years, and maybe even decades, are expected to bring prosperity to the economy and business world, but to reach it, it is necessary to first suffer the constant bear attacks and survive massive losses.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
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Aluna.Social is a Compelling Social Platform for Crypto Traders and Investors
When one thinks about the social media landscape, the companies that first come to mind are most likely Facebook, Instagram, LinkedIn, and Snapchat. These platforms are a great way to stay connected with friends, families, and colleagues, especially when geographic distance is a factor. But, in addition to just chatting about life in general and sharing pictures, social media can be used to bridge the information gap that exists within the investment community.
Over the last decade, many trading offices have been established in large cities all over the world which allow solo traders and investors to pay a monthly fee in exchange for a workspace. The real benefit to trading in these offices is to participate in the free flow of trading ideas and information. Proprietary trading is one of the most challenging careers to be successful at and the exchange of ideas is almost required in order to succeed. Traders at hedge funds and investment banks work in teams so why shouldn’t remote traders?
While these trading offices are a great way to help bridge the information gap, Aluna.Social may provide an even better way, especially as it relates to cryptocurrency trading.
Aluna.Social, founded by Alvin Lee and Henrique Matias, is a multi-exchange social trading terminal for crypto traders and investors. The goal of the platform is to help newcomers shorten their learning curve,…
CoinFlip Scores Big with BRD Wallet Partnership
As the crypto markets move closer to mass adoption, one of the keys for future success will revolve around attracting as many market participants as possible. While many crypto users are extremely tech oriented, a lot of those on the sidelines are not. The cause of waiting on the sidelines could be due to a variety of reasons such as fear of the unknown, lack of knowledge, age, or a combination of all of the above. In order to entice new users to join the crypto revolution, crypto ATMs are rising up across the country. Of those, the largest and most influential crypto ATM company by a significant margin is CoinFlip.
In early October, CoinFlip announced on its Twitter that it had officially partnered with BRD Wallet to re-introduce their crypto ATM map. Now, BRD wallet users will be able to locate their nearest CoinFlip ATM and receive a 10% discount for both buys and sells. BRD brand awareness is growing quickly within the crypto community thanks to its innovative and entrepreneurial spirit. The team strongly believes in the value of financial freedom and independence, and want to empower people across the world by leveraging the possibilities that Bitcoin and other cryptocurrencies provide.
Cryptocurrencies are already making a huge difference around the world. Citizens of Venezuela, a country devastated by rampant inflation, have been using several cryptocurrencies…
Cryptocurrency Collateralized Debt Positions Are Growing in Popularity
While Bitcoin (BTC) continues to hover around the magical 10,000 price level, altcoins continue to fight an uphill battle. Simply put, hopes of a future bull run continue to diminish as Bitcoin maintains its dominance. One school of thought is that a few altcoins will survive and flourish, but which ones are anyone’s guess. That being said, it’s hard to go wrong picking against the top coins like Ethereum (ETH), Ripple (XRP), Litecoin (LTC), and EOS. These projects have managed to find a foothold in the market and have a better chance than most of staying there. While traders wait for their positions to increase in value, one opportunity that may be worth looking at is initiating a collateralized debt position.
What is a Cryptocurrency CDP?
In traditional terms, a CDP is essentially putting up collateral in order to receive a loan against the deposited amount. There are several examples of this in our day to day lives. Auto title loans from large companies like TitleMax are extremely popular with consumers. Consumers are essentially able to use their car as collateral in exchange for a cash payment which can then be used for whatever needs the consumer has. The consumer can continue using their car as long as debt payments are made.
The same concept applies to cryptocurrency CDPs. Consumers are able to put up crypto tokens, such as…
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