https://www.ccn.com/crypto-rollercoaster-explaining-the-recent-market-performance/ submitted by
Just when it appeared that the cryptocurrency market was about to bottom out just a fortnight ago (with Bitcoin reaching a reported
14-month volatility low), the market subsequently started displaying indicators of a directional shift.
Last week however, we saw a short-term appreciation in value. In typical crypto fashion it was just as rapid if not more so than the recent decline and Bitcoin, in particular, was observed
to have exceeded “a key resistance level at $7,000 after breaking out of the $6,800 mark… crucial for the short-term recovery of Bitcoin.”.
Right now however, we are looking at what some mainstream media organisations have described as an ominous price-crash: if not full-blown ‘meltdown’
Causation Between News and Value?
The reasons for the crash – like many before – are likely plenty, such as the theory of market manipulation by wealthy crypto-barons, amongst other interested parties
Just looking at the news recently, we can identify a handful of reported events and moments which might have contributed, coincided with or preceded this rapid deppreciation in value. They include:
- Goldman Sachs’ decision to shelf previously announced plans for opening a Bitcoin trading desk.
- A continued rampancy of international cryptocurrency fraud, theft, and misappropriation.
- Speculative doubt stemming from recent pump-and-dumps which utilize the ‘Bitcoin’ moniker.
- Prophetic warnings from pundits and other luminaries.
Looking at the Market
The large fall in value could be considered either a correction or a short relief. Either way, it is fair to say that if the market were to return to a more positive trajectory: we could expect the collective growth to be reflective year-over-year, exponentially.
Coinschedule (an “ICO listing and cryptocurrency portal”) recorded $3.695 billion
total funds raised in 217 from 209 ICOs. By compairson, the same site records 500% times more investment this year (up until August 2nd, 2018) – with $17.489 billion gathered from 686 ICOs so far.
It is still important to bear in mind the sobering fact that a great number
of ICOs and cryptocurrencies fail
Additional Studies and Observations Cezary Graf
(AKA Crypto Poland
) is a Polish blockchain enthusiast who recently shared a tweet which featured an image which depicted where ‘Bitcoin & The Crypto’ as a collective industry would place in Statista’s list of ‘The 100 largest companies in the world by market value in 2018 (in billions of U.S. dollars)
Graf’s post only provided information from the first page and 10 entries of Statista’s list. This suggests that the total industry value is comparable with the likes of Apple
, and Amazon
(The Big A’s) – whose combined value is over $2471.1 billion.
Veering beyond these pages however and considering cryptocurrency’s overall market value has surpassed $262,5 billion. Comparatively it would fit it closer to 17th place – best resembling the following trio of financial industry giants.
Statista isn’t the only organization to perform and curate in-depth analysis of blockchain and the cryptocurrency investment market.
Back in 2017, PricewaterhouseCoopers (AKA PwC) performed an investigation into the same criteria – entitled ‘Global Top 100 Companies by Market Capitalisation, 31 March 2017 Update
’ with similar results.
The Market Future & ICOs as a ‘Bubble’
Some of the great issues, conversely, plaguing the crypto market include fraudulent and scam ICOs: as well as honest projects which simply offer little to no value to justify their price or existence.
This is in addition to (and arguably supported by) an almost universal lack of effective regulations or standards to prevent such tokens, and has led to some going as far as to call ICOs an ‘investment bubble
If true, the space will prove unsustainable if it continues on its current trajectory: a claim which has been thrown around by those in the industry since at least the end of 2017
. If, however, things continue as they are right now then we are likely to enjoy a profitable end of 2018.
Court of the Crypto Kings
No matter the market status: the value of many a cryptocurrency lies in their viability and practical effectiveness of their end-goals, and means of achieving them. Bitcoin
of course is the original cryptocurrency and has established its value through its integrity (public whitepaper and open-source nature), as well as it’s practical effectiveness and the rate of adoption it has enjoyed upon implementation. Ethereum
is arguably one of the most successful challengers to the BTC throne so far. The project helped to instigate the now-prevalent ‘Blockchain As A Service’ (BaaS
) sector, and offers a platform upon which new utility tokens can be constructed – powered by ‘Ether
’. Lightning Bitcoin
is an example of the new market contenders. One of many which offer a direct and highly competitive alternative to many of the key features associated with Bitcoin. According to their website: ‘LBTC
’s utilitarian value as a tradeable currency is boosted by its speed and low-cost transaction fees.
Looking at New Securities Security Tokens
’ comprise a much newer field, which has been quoted to have contributed to the major crypto-crash back in January 2018. The first of these digital securities contracts were sold in December of the previous year and expired the following month – and thus, correlated with the market drop.
There has been a lot of news
regarding security tokens over the past year, including attempts to either regulate or otherwise ensure a level of safety with regards to risk and fraud prevention, as well as protection of funds. These efforts come from a combination of governments and independent projects and organizations. MOBU
is one of these projects and seeks to utilize a proprietary utility token (the eponymous ERC20 ‘MOBU’) to power its “end-to-end solution for ICOs to launch compliant security tokens on the blockchain.”. Features
of MOBU cited include KYC / AML compliance integration, enforced and maintained through Ethereum based smart-contracts.
This is in addition to what they call the “MOB20 protocol will define a set of commands that a compliant security token should implement.”
It would be easy, upon reading head headlines and lead-ins such as this, to believe that Goldman Sachs had invested $50 million in Bitcoin. Indeed,. 15 DEC 2017 Exchanges at Goldman Sachs Tax Reform, Bitcoin and the Year Ahead for Financials. Richard Ramsden of Goldman Sachs Research explains what tax reform, regulatory change and technological innovation could mean for the US financial services industry on our podcast, Exchanges at Goldman Sachs. Listen Now. TOPIC: Blockchain. 16 NOV 2017 Talks at GS Naval Ravikant, The Capital Play ... Goldman Sachs have tired of being nagged about Bitcoin — and did an investor call about this nonsense, and about what might be good for investors in the Covid-19 era. So, Goldman Sachs made several obvious and uncontroversially true statements about internet novelty collectibles. Page 29 notes that bitcoins: [Goldman Sachs, PDF] Goldman Sachs has claimed that bitcoin is a bubble bigger than the dot-com era and the famous Dutch tulip mania. In a research letter to investors, the banking firm’s analysts warned about the ... The $96 billion investment bank Goldman Sachs believes bitcoin is the new gold, the premier store of value in the global finance market. Bitcoin, Natural Progression From Fiat Money. In a report sent to the bank’s clients, Goldman Sachs analyst Zach Pandl wrote that the rapid increase in demand for bitcoin has been triggered by the growing dissatisfaction with regulated monetary systems and ... Bitcoin is a distributed, worldwide, decentralized digital money. Bitcoins are issued and managed without any central authority whatsoever: there is no government, company, or bank in charge of Bitcoin. You might be interested in Bitcoin if you like cryptography, distributed peer-to-peer systems, or economics. A large percentage of Bitcoin enthusiasts are libertarians, though people of all ... Goldman Sachs has published a report naming bitcoin and Ripple among the technology trends that could shape the future of global finance and payments. But bitcoin does not provide any of these key advantages. Quite the contrary.” Source: Goldman Sachs Investment Strategy Group (Page 41, Exhibit 46) The note described: “There is no doubt that the rise in bitcoin’s price has pushed it into bubble territory,cryptocurrencies have moved beyond bubble levels in financial markets.”
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