Speculation And Actual Value: Separating The Hype From Utility In Digital Currencies
https://seekingalpha.com/article/40...ue-separating-hype-utility-digital-currencies
Summary
Digital currency industry is evolving.
Investment opportunities exist in many blockchain based digital assets.
Several factors to consider in the Initial Coin Offering space.
Since the start of the year, the digital currency market has been dramatically reshaped in terms of both scale and composition, to an extent that the mainstream media has yet to fully appreciate. Bitcoin - the industry's largest and best-known digital currency - continues to dominate the headlines.
It is easy to see why the focus has remained on Bitcoin… its price and market capitalization continue to soar to new records. The growth rates are eye watering to anyone with experience in traditional finance. Bitcoin's market capitalization at the end of last year was $15.3 billion. Just over five months later, its value is up nearly threefold to $44 billion. The price per Bitcoin is now solidly above $2,500 per coin - double the price of gold per ounce, and fifty times the price of oil per barrel - and it's up from just $953 at the beginning of the year.
But as dramatic as Bitcoin's growth has been, it is significantly underperforming in the digital currency market as a whole. In fact, Bitcoin's market share of the digital currency market has declined from 87% to 39% so far this year. Two main drivers are eroding Bitcoin's market share - rapidly increasing prices for competing digital assets, and the proliferation of new digital assets that are often seeking to serve needs not addressed by Bitcoin.
The growth is astounding - the aggregate market capitalization of all digital currencies excluding Bitcoin has grown from $2.2 billion to over $71 billion so far this year. That is over 3000% growth in just five months.
The growth is prompting many commentators to opine the industry is in a bubble. Indeed, many signs of a bubble are there… new projects are able to raise millions of dollars through "Initial Coin Offerings" (ICOs) before even launching a product. Money is now flowing into the market in seemingly indiscriminate ways… one day last month 99 of the top 100 assets were trading higher than the day before, and by large margins.
https://seekingalpha.com/article/40...ue-separating-hype-utility-digital-currencies
Summary
Digital currency industry is evolving.
Investment opportunities exist in many blockchain based digital assets.
Several factors to consider in the Initial Coin Offering space.
Since the start of the year, the digital currency market has been dramatically reshaped in terms of both scale and composition, to an extent that the mainstream media has yet to fully appreciate. Bitcoin - the industry's largest and best-known digital currency - continues to dominate the headlines.
It is easy to see why the focus has remained on Bitcoin… its price and market capitalization continue to soar to new records. The growth rates are eye watering to anyone with experience in traditional finance. Bitcoin's market capitalization at the end of last year was $15.3 billion. Just over five months later, its value is up nearly threefold to $44 billion. The price per Bitcoin is now solidly above $2,500 per coin - double the price of gold per ounce, and fifty times the price of oil per barrel - and it's up from just $953 at the beginning of the year.
But as dramatic as Bitcoin's growth has been, it is significantly underperforming in the digital currency market as a whole. In fact, Bitcoin's market share of the digital currency market has declined from 87% to 39% so far this year. Two main drivers are eroding Bitcoin's market share - rapidly increasing prices for competing digital assets, and the proliferation of new digital assets that are often seeking to serve needs not addressed by Bitcoin.
The growth is astounding - the aggregate market capitalization of all digital currencies excluding Bitcoin has grown from $2.2 billion to over $71 billion so far this year. That is over 3000% growth in just five months.
The growth is prompting many commentators to opine the industry is in a bubble. Indeed, many signs of a bubble are there… new projects are able to raise millions of dollars through "Initial Coin Offerings" (ICOs) before even launching a product. Money is now flowing into the market in seemingly indiscriminate ways… one day last month 99 of the top 100 assets were trading higher than the day before, and by large margins.