The Crypto Market, Accelerating into the Future
Blockchain, once made popular by Bitcoin, now extending far beyond.
Every breakthrough technology brings changes to conventional business models. We consider blockchain to be a foundational technology with the potential to create completely new economic and social systems.
History suggests any disrupting technology is affected by several factors, defining the speed of its full implementation to real-world applications. According to Harvard Business Review , these factors are novelty and complexity. The research states there’s a direct correlation between an amount of effort required to get users familiar with this technology and how new the technology is. From this perspective, blockchain’s still considered a new technology. Although it appeared 10 years ago, it hasn’t been widely adopted yet, and it’s only taken its first steps. As to complexity, it’s determined by the number of parties working together to form value. Blockchain technology will achieve mass adoption, bringing more value to more users, through different sectors of the economy. This will happen as new blockchain projects are created and traditional companies continue entering the blockchain space. According to recent market statistics, blockchain is accelerating its penetration into our world. This can be seen by looking at the crypto market capitalization, the amount of active crypto wallets, users, and the market forecasts.
Over the past year, the number of blockchain wallet users has increased by over 6 million, ending the 1st quarter of 2018 with 23 million users. This positive trend should continue. Starting in 2017, with the total cryptocurrency market capitalization being over $17 billion, it’s shown a dramatic increase to around $400 billion today. The cryptomarket is still dominated by Bitcoin, taking up 87% of the crypto market in early 2017, down to 36% at the beginning of 2018. Being the leader, Bitcoin is gradually giving ground to Ethereum. Making up only 4% of the market in 2017, it managed to strengthen its position up to 12% at the beginning of 2018. Another crypto, showing even more significant growth, is Ripple. With an increase of 13% over the last year, its share was 14% at the beginning of the year. New blockchain projects from various sectors, like fintech, gaming, security, healthcare, and social platforms, are supporting this trend. These projects are the driving mechanism for the future growth of the crypto market cap and its shifting percentage shares.
The largest ICOs of 2017, include Filecoin, raising around $250 million, EOS raised $200 million, Bancor raised $153 million, and Paragon, $120 million. With a cumulative 300 000 followers on Twitter alone, it’s highly likely that these companies contributed to the growth of active crypto wallet users. 2017 showed an increased demand for the Ethereum blockchain as the majority of projects chose Ethereum as the underlying technology for their projects, resulting in a shift of the crypto market share percentages.
It’s difficult to predict whether these current market dynamics will continue, as big projects raise millions during their ICOs. Can they create a rising demand for crypto and change the current market trends?
In the past the blockchain market was formed, and mostly dominated, by tech companies like Ethereum, a decentralized platform to work with smart contracts, IOTA, a blockchain company with a focus on the Internet of Things, and Coinbase, a digital currency wallet and exchange. Today more and more companies from traditional sectors with solid reputations are taking the global blockchain route. For instance, Telegram, already netting $850 million during their ICO, Kodak, preparing to hit the market, Starbucks is full of blockchain rumors and and us, a social Q&A platform “ASKFM” also getting ready for our ICO round.
Just before and after the ICO, most companies build the audience from scratch and attract users to the project at the idea stage. Alternatively, companies from traditional business sectors have existing users genuinely interested and loyal to the brand and new products it brings.
For instance, we at ASKfm are seeking to create a Q&A blockchain ecosystem with the help of an existing 215 million user base that have the potential to become crypto adopters. This ecosystem will create a new knowledge economy based on the blockchain. By tokenizing social media interactions and rewarding active users for creating and evaluating content, we intend to reshape access to knowledge worldwide. By conducting an ICO, ASKfm 2.0 will significantly boost blockchain usage, causing the biggest user transfer in the history of blockchain to date.
Let’s assume the market cap increase of $383 billion was supported by 6 million new, active crypto users. ASKfm has the potential to change the crypto market share dramatically by bringing over 200 million users, contributing to its mass adoption. Increased demand will not only skyrocket the crypto market capitalization but ultimately lead to further development of blockchain tech.
As whales from the traditional sector enter the blockchain space, this new breakthrough technology will become truly global.
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