Cryptocurrency Viability Analysis 2018 Q4

Cryptocurrency market continues to plunge with major currencies losing over 40% market cap in just a span of one month (From the second week of November 2018 to the second week of December 2018). Bitcoin’s dominance over the marketplace escalates while the bearish momentum is still lurking. Despite the slowdown in the trade, visionaries like Tim Draper, Peter Lynch, Bill Gates, Jack Dorsey, Patrick Byrne and many more still believe that cryptocurrencies will be reshaping the future economy.

2018 had a great start but sluggish end

In the very first week of 2018, cryptomarket peaked to an all-time high with more than $60 Billion of cryptocurrency traded within 24 hours and the total market capitalization reaching over $830 billion. Over the course of the next month, the entire market witnessed a free fall — crashing by almost 2/3rd to just $277 Billion in market capitalization.

Source: Coinmarketcap

For skeptics, this correction was a pivotal opportunity to combine effort and discredit the value of cryptocurrency assets. This exertion could be largely seen on part of news sites.

Every action has a volatile reaction in Crypto space as the market is sensitive to news and many other factors.

An indexed ROI graph of all ICOs that constitutes to 75% of all Cryptocurrencies indicates that 300+ ICOs ended Q2 with a positive delta over the period May to June 2018.

Indexed RoI graph of all ICOs combined (Source: InWara’s Database)

Even though the ICO market appears to have been in a downtrend, an individual could have made a 5X-10X profit had he bought into the right ICOs. It is fair to say that Cryptos grew in 2018 as the number of VC investments increased significantly. However, trade volumes and crowdfunding have taken a blowback.

Possible causes behind this bearish trend

It would be absolutely naive to believe that the crypto market is not manipulated or controlled by market mechanism to some degree as referenced in the article by super crypto titled ‘Bitcoin-Manipulation-Cartel’.

After the Bitcoin’s price rally of 1K to 20k from Jan 2017 to Dec 2017 and 95% crash during Dec 2017 and Dec 2018, it is evident that the market trend follows a cyclic pattern and it is inevitable to see both the massive booms and massive bursts.

However, what’s interesting to note is that the institutional grade investors and venture capitalists are buying in crypto while the market is still REKT.

Private funding has seen significant growth in 2018 with total rounds of funding doubling as compared to 2017.

Private Funding & Round Size By Quarter (Source: InWara’s database)

The active rise of Venture Capital in pre-sale and private sale stages is an indication that the crypto market is beyond FOMO and FUD phases and the plummeting of the crypto market can be legitly explained by cartel theory.

Future of Cryptocurrencies and blockchain

Blockchain will save the cryptocurrencies as the potential scalability, lightening network, smart contracts and the solutions provided by the distributed ledger will possibly be reshaping the future economy.

The underlying values of blockchain technology and its decentralization of transaction network has the potential to solve the wide spectrum of problems that exist in a centralized network.

The current issue with digital currencies is that most presume that the digital currencies are a new form of currency and are in a war against the existing fiat currency. It is vital to understand that it’s not about replacing the fiat currency but revamping the way funds are transferred and reinventing the way assets are managed.

Are the Companies behind ICOs legit?

In Q3, 2018 the number of product driven ICOs have seen a significant growth compared to Q2, 2018. This shows the seriousness of companies behind ICOs in their project.

% of ICOs with a working prototype (Source: InWara’s database)

Product roadmap: Expect maximum launches in Q4, 2018

Source: InWara’s Finance sector report

500+ companies have projected roadmap events in 2018. With investors getting vigilant, companies have realized the significance of transparency in reporting elements of their ICO. However, current trends suggest delays in the roadmap making Q1, 2019 an exciting prospect.

Considering all these factors and also the long due hearing of SEC for ETF’s approval in December 2018 which is now postponed to February 2019, one may say that the long-standing winter in the crypto market may come to an end.

Cryptocurrency Viability Analysis 2018 Q4 was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.