Crypto Market Thoughts
For example, I think that the current market capitalization of the overall market hovering above $100 billion is a strong position to find ourselves in. However, the next couple of months will be challenging because it will be more of the dominance of coins changing rather than the overall market cap. I believe that the top 50 assets will start to diverge from the thousands that have since been released over the last two years. This could have a number of implications for how we view the market. While controversial, I think that bitcoin will remain limited to about 50% of the market capitalization for the foreseeable future. I think others will start to take more marketshare as roadmaps of strong projects start to increase in adoption and their use cases are seen in action.
These changes will make investors and participants in these markets look at more metrics like transactions, capacity, new wallets created, and community development as the main factors to support demand for the assets. As bitcoin continues to be the big elephant moving along but with limited development, others will be able to demonstrate relative strength or growth in the crypto space. The current market is already prepared to deploy this capital as you look in the top 50 assets; most of the funding for these changes will come from either bitcoin itself as it is the main crypto pairing to most other assets and also stablecoins. As of today there are four stablecoins in the top 50 and others in the top 100 with approximately $3 billion worth of assets in them. The ability to move these assets into their trading pairs in the short amount of time could have huge implications to the market. This is what could drive the divergence of performance that I expect to see sometime this year.
While I will reserve my thoughts at this point as to what other projects that could benefit from this mainly because I am still only an investor and have no technical knowledge behind most of these projects, I do think that they will be grouped into sectors within the market and will start to move in correlation with the sectors. I think it will mature into what we see today in traditional financial markets such as stocks where groups of companies in the same industry tend to correlate and performance with each other. However, sectors amongst each other often are correlated or even diverge from each other based on the economic cycles we find ourselves in. Some of the sectors that I think will start to be created within crypto are platforms, payments, store of value, decentralized exchanges, among others. How they diverge from each other will be interesting to see as I believe it will depend on technology deployment and adoption.
One thing is for certain, the market will never perform as we all expect however will adjust according to the realities of how technology is adopted around the world. Therefore, from an investor perspective we need to prepare ourselves to remain agile and adapt to the changes that will be coming. We need to prepare for more bad news such as projects failing on their roadmaps and running out of funds to support their development. We also need to prepare for good news has some projects advance and execute their roadmaps. A wild card that I have also thought about is that similar to traditional market cycles, there may be instances where projects consolidate in order to leverage each other’s technology and progress thus far. While I do not know if this is possible within the blockchain space, it would be interesting to see it happen and what implications it would have in the market. This is typically good news as it eliminates competition and improves both productivity and scale for the consolidated project.
In conclusion, the best way to prepare is to invest in your most important asset which is ourselves. If we can obtain knowledge to better understand the industry, we can leverage it in order to adapt to change as it comes. I think we are privileged to be part of a blockchain that has evolved into an ecosystem that provides us the opportunity to share our thoughts and engage with perspectives of the future in what is blockchain technology. This is what attracted me to Steem and think that the value created by the content shared here is what could differentiate Steem in the future as well. What are you thoughts on the future of blockchain technology and the underlying cryptocurrencies that surround it? I look forward to hearing your thoughts and feedback in the comments below.
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Interesting thoughts here. I certainly hope you are right and there is some divergence. However I think most will continue to ebb and flow with the whims of btc. With the exception being every now and then when major news announcements drop. I think exchanges and funds have the altcoins pegged to mostly just move whenever btc does and I think that peg is stronger than ever before. Getting more coins with fiat pairs would help.
Agree that bitcoin will remain dominant given its position but others will start to have more influence as many others fail. I feel that the platform blockchains like Ethereum, EOS and others will gain more attention as scalability is proven and Dapps start to adopt quicker that the cryptocurrencies themselves. Thanks for passing by and providing your thoughts!
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I think you are right. I think bitcoin will work best as a store of value, which there is a large market for. However, fabric/platform chains that eventually will have businesses built on top of them could feasibly have even larger markets, like you are suggesting.
The challenge is to see where the herd is headed without getting to fixated on where it is.
For many new entrants, this is their first bear market. I think those that wanted to sell have done so. We are now waiting for the bottom, but I have a suspicion the bottom has come and gone.
We are less than 18 months away from the Bitcoin halvening. This means miners will have half the number of bitcoin to sell onto the market.
Remember, steems inflation rate is also decreasing and hopefully when steemit and @ned move the backend of the blockchain onto RocksDB, we can expect a drop in costs and hopefully fewer steem being sold into the market.
Interesting times!
@kabir88
Strong hands remain but the short sellers continue to have a field day as buyers have left and demand is stale. Until technology improves and adoption increases, prices will be going sideways. However, altcoin project present an opportunity to break the mold and have more progress in the short term.
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great article.
Check out www.yen.io we are creating the worlds first MEX metaexchange for cryptos.
I suspect that BTC will remain the king of cryptocurrencies for some time and yes I agree that we should start to see some divergence in cryptos in the near future. I suspect that Eth, XRP, Stellar, Tron, monero, cardano, Litcoi, Icon, and Neo are some good cryptos to watch and invest in. As always do your own research but these are the ones that I like and of course now is the time to acquire and HODL your BTC. Many finance people suspect that we may see a $250K or greater BTC price in the next 2-5 years. So HODL on to your BTC for the long term. You do not want to be that guy who bought the pizza with 30,000 BTC back in 2008. That was a 30 million dollar pizza in 2017 if he HODL on to it.
No doubt the importance of BTC as it will be like the USD and become the “reserve cryptocurrency.”. However, as it consolidates, there is more room for performance elsewhere in my opinion.
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Interesting thought of splitting up the coins into sectors like the SPDR ETF sectors.