The roller coaster rise of cryptocurrencies in 2018 — Experts explain
2018 is coming to an end. For the cryptocurrency market, it has been a roller-coaster ride through the year. From an all-time high to an all-time low, the markets have seen all of this and more. We asked a few market leaders to analyze the crypto market in 2018.
2018 started with a bang to fizzle with a whimper
The year started off with some real fireworks when in the very first week, the markets surged to an all-time high with cryptocurrency trading in excess of $60 billion in just 24 hours. Total market capitalization went past $830 billion. The excitement, however, was short lived and within the next month, the markets went into freefall, losing almost 2/3rds of its capitalization to come down to $277 billion.
Eric Alexandre, Founder and CEO of Jetcoin Institute, a global platform for talented individuals to climb the ladder of stardom through crowdsourced fan support and engagement, believes that 2018 saw a correction of the asset market that was obvious and imminent. “In many ways, 2018 was the year where market pressure and uncertainty in the bitcoin protocol made it a bear year. The retail market took a downturn, newbies and non-educated token subscribers suffered heavy losses that created a FUD wave killing the retail appetite.”
Top cryptocurrencies showed slow growth
Among the major cryptocurrencies, apart from Ethereum, all top digital assets have shown positive year-on-year returns. Bitcoin, Bitcoin Cash, Ripple’s XRP and EOS — all have shown impressive double digit growth, though not as spectacular as their rise during the bull run.
Ashford Daniels, Co-founder and CEO of Coinware Cryptocurrency Exchange believes that while 2018 was a pretty bearish year for the crypto space in general, there have been some real tech platforms with real world usage. “I feel that after more than 50% of ICO projects of 2017 failing, the focus was more on real projects rather than just ideas on paper. Project developers and entrepreneurs have realized this and are now creating platforms that have or will have a massive impact and adoption potential.”
The ICO market’s ups and downs
The ICO market, however, was seen going strength to strength with over a thousand ICOs raising well over $20 billion in funds. A closer look tells us a different story, though. The first and second quarters of 2018 saw 647 ICOs raise almost $17 billion. The next two quarters were tough as more than 350 ICOs could only rake up just over $3.5 billion.
Ronnie Ng, co-Founder and CMO at simplyBrand, a platform that helps brands fight online counterfeiting through AI, blockchain and crowdsourced information, says, “2018 wasn’t a great year for ICOs with an average fund raise of around five to eight million dollars per project. I think this is a culmination of weak market sentiments brought about by the falling cryptocurrency prices and the hype surrounding ICOs.”
With more than half the ICO projects in 2017 went dud after raising funds, investors grew wary of scams and were seen doing better due diligence. As against 2017, 2018 saw many product-driven ICOs. Close to 38% of ICOs in Q3 of 2018 had a viable product ready before the start of the funding process. This shows that companies are more serious and this played a major role in reducing fly-by-night operators from the crypto space.
So are ICOs to blame? “No, I don’t think so. ICOs are great fundraising vehicles. But I think they have outlived their utility. It is time to move on to a better, more robust process that can attract not just retail investors but mainstream institutional finance,” says Ronnie.
Another aspect that ICOs are focussing on is transparency. The last quarter of 2018 and the first one of 2019 promises to be exciting as around 500 projects have projected roadmap events then. This means that investors will see how their money was utilized to create real-world solutions as promised in the projects’ roadmap.
“Most projects that had promised revolutionary changes in major industries failed miserably on their delivery because of lack of transparency. On the other hand, we saw the entry of new participants who actually had established businesses and/ or MVP. Wall Street and big institutional funds became very active in investing in blockchain projects,” says Eric.
Regulatory indecision and media played a role in the FUD
In 2018, the regulatory scene has been dynamic and evolving, with the US SEC playing a central role in creating waves in the market. This has also been one of the reasons of the bearish trend in the crypto market, with many present and future projects apprehensive of the regulatory challenges they might have to face.
A major part of mainstream media has also played a role in the bear market. Many media houses have predicted the bursting of the “Bitcoin Bubble.” A research done by Clovr suggests that US and international media were negative in its sentiments when crypto prices started rising and were comparing the crypto phenomenon with the “Tulip Mania.”
Anton Dzyatkovskiy, Co-founder of Platinum, a global company providing a full suite of services for STO, ICO, and IEO, believes that the crypto markets are undergoing an important transition. “As is the case with all things new and revolutionary, what the crypto market is experiencing is a natural evolutionary process. In a bid to define and refine the future, the crypto community needs to accept regulatory compliance that will protect investor interests and also protect the core democratic values on which the blockchain movement is based.”
The combined confusion created by regulators and the media has created a FUD environment that is benefiting whales and sharks of the crypto world, while creating wariness in the majority of the crypto community. However, the well-informed and loyal followers of the crypto phenomenon understand that the blockchain technology will eventually save cryptocurrencies. The technology is solid and has the ability to transform almost all aspects of human endeavour.
2019 — Forecasts and expectations
So what does 2019 hold for the crypto space? We asked our experts to make their predictions for the crypto markets for the new year.
Ronnie Ng sees broad adoption of the blockchain technology. “We are observing Fortune 500 companies seeing potential in this technology. This will lead to massive spending in this field. I am also hoping for regulatory clarity on digital assets.”
Eric Alexandre believes that in 2019, we will see the rise of working products (DAPP) already listed and going live. “As this happens investors and subscribers will start showing renewed interest in purchasing these undervalued assets.” Ashford Daniels is extremely positive about the crypto markets fortunes in 2019 and hopes to see a rebound from the bearish trend of 2018.
Anton Dzyatkovkiy believes that STOs will be adopted by blockchain companies to protect themselves from the indecisive regulatory landscape as well safeguard investor interests. “This will go a long way in increasing investor confidence. STOs will eventually evolve and grow and will be able to satisfy the appetite of regulated financial markets and large investors.”
Eric Alexandre mirrors Anton’s opinion. “Regulators took a step forward in some markets such as Malta, Singapore and Switzerland enabling the creation of a fully regulated STO. This will bring with it a whole new set of challenges, but I am hopeful that the new year will be massive in defining the direction for this field. STOs seem to be the new hot wave but will not have the benefits of crowdfunding aspect ICOs made possible unless regulators create new set of recommendations that will open the floodgates.”
With the new regulatory protocols imminent, businesses tending to develop real products and companies looking to raise funds through a compliant process — STOs — the crypto market’s future in 2019 looks hopeful. Are you excited about 2019? We sure are!
