Cryptocurrencies Have a Year-to-Date Market Loss of 75%. What Happens Next?
In January, the
We can now safely say the Bitcoin, or
The two biggest commodities and futures exchanges in the world, the CME and Cboe, also now offer Bitcoin futures. Intercontinental Exchange (ICE), the owner of the NYSE and a phalanx of other major international exchanges,
Bubble or no bubble, cryptocurrencies have undeniably made progress and are in a stronger position than this time last year. The question is, what happens next for cryptocurrencies? The market could continue on its bearish trajectory, CME and Cboe discontinue Bitcoin futures and enterprise-level use cases for blockchain technology fail to gain traction. But that, at least all three, appears, while not impossible, unlikely. So where next?
A period of consolidation is perhaps most likely. While the boom and bust of the past year or so was by far the biggest yet it was also not the first. The history of Bitcoin and cryptocurrencies has been characterised by a number of periods of hype and prices running up before dropping back again. Each time the market has come back stronger following a lull. Regulatory frameworks will be key and there is clearly a natural cap on the number of viable cryptocurrency alternatives which is far below the 100 or so currently listed on cryptocurrency exchanges. The era of of flakey, sometimes fraudulent, unregulated ICOs (blockchain projects raising money in a crypto equivalent to IPOs) raising millions to hundreds of millions just by mentioning the word ‘blockchain for (insert industry)’ is presumably, and hopefully, over.
But would ICE, the CME, Cboe, Microsoft, Starbucks and the rest be investing in a cryptocurrency future now if the ‘fad’ is on the verge of disappearing back from whence it came? Of course not. They might be wrong of course but these financial institutions and companies, which are among the biggest in the world, think that while the ‘bubble’ has burst, the trend remains. The dotcom bubble burst, so have housing bubbles. The tech and property sectors are doing alright despite that. Tulip bulbs are still even bought and sold. The cryptocurrency market’s story is also almost certainly not over.
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