Ethereum is struggling to reach US$800 after falling 38% percent from US$1,300. And ripple has tumbled down to US$0.90 from its high of US$3.
Overall, US$550 billion has been wiped off the entire cryptocurrency market in the space of a few months. A decline that has come as a shock to the system for many. It has even put into question the viability of the crypto market itself.
Of course, expectations were too high to begin with. Like most tech booms, cryptos’ debut into the mainstream was jarring to say the least. Moving rapidly from a niche tech concept, that only fringe communities knew of, to an investment extravaganza everyone was scrambling to get in on.
That said, cryptos are by no means a recent innovation. They’ve been circulating for close to 10 years now and the revolutionary ideas behind them have been in development for even longer.
It’s only in the last year that cryptos became known for their rapid growth and envy-inducing returns. And the possibility for an ordinary investor to become a crypto-millionaire subsequently caused the mania to take hold.
This frenzy spread far beyond the investing community — enticing unlikely buyers looking for quick gains. As those fickle investors were unaware of how volatile crypto markets could be, they have suffered the most from the erratic fluctuations.
The ABC recently reported that about half of all initial coin offerings launched last year have either failed or disappeared. Millions of dollars simply vanished into thin air.
The long list of exchange hacks has been another major setback for investors. To name a few, the Coincheck exchange hack last month saw $530 million worth of cryptocurrency stolen. And the Bitfinex hack of 2016 lost approximately $72 million worth of bitcoin.
When you add the price volatility onto this, cryptos clearly aren’t a safe bet. But it’s their exciting nature that has kept people investing against all rational judgement. Everyone, particularly millennials, want a piece of the pie. And for those who have grown up in the digital age, the appeal of this technology has kept the crypto trend alive.
Right now, new cryptos are popping up all the time. Blockchain innovations are even more prevalent. Major companies are keen to jump on the bandwagon to modernise their businesses and gain publicity.
For example, Amazon is considering introducing an ‘Amazon Coin’. Many Amazon users responded positively to a survey which asked whether consumers would use the crypto.
Starbucks is also planning to introduce crypto and blockchain into their business, creating a completely cashless store.
Meanwhile, Garrett Camp, the chairman of Uber, has just created his own cryptocurrency called ‘Eco’. His aim was to make a new and improved coin that tackled the issues cryptos have been facing. Making it more secure and efficient in terms of transactions and energy usage.
It would seem the crypto market is still alive and kicking.
Katie JohnsonMarkets & Money
Brought to you by King Capital & Investment Corporation Ltd, in association with Investment Research Group Ltd, Equity Investment Advisers Ltd & www.Sharechat.co.nz. || march 17, 2018 |||