2017 was the year when the cryptocurrency market saw a meteoric rise. Bitcoin and Altcoins grabbed eyeballs and joined the mainstream market. With the hike in the value of cryptocurrencies and the rise of market capital, the investment market went through a paradigm shift. More and more traditional investors and venture capitalist paid heed to cryptosphere and started placing big money in the crypto market.
The change in calendar however, brought bad news for the coin market. In just the first quarter of 2018, the market faced regulations and ban by several Governments across the world, internet giants ban ICOs and cryptocurrency ads on social media platform and Mt.Gox sell-off. The market plunged with every negative news and since then it has not been able to recover. The numbers in HODL gang reduced as people started labeling cryptocurrency market as another Dotcom bubble.
Cryptocurrency Market: Another Dotcom Bubble?
As cryptocurrency market is highly volatile, it becomes difficult to gauge it. Every single day, you see the market sway from Green to Red to Green again in a matter of seconds. The quick sway leads to gigantic gain or tremendous loss in value in thousands of percentage points.
At times the movement is inexplicable, and the rise and fall are not because of news or economic outlook of countries around the world. As long as the volatility is massive, there will always be a doubt in the mind of people that it could become another dot-com bubble of the late 1990s.
The Current Status of Crypto Market
One cannot pinpoint the current cycle of cryptocurrency market. If we still compare it with the dot-com era of 1990s, it took about three years for the Nasdaq index to reach its peak. Through cryptocurrency existence could be traced back to 1980s, it was only in 2014 that Bitcoin came to the forefront. Crytpo frenzy started in the year 2017, so as they say it could take up to next three years for the bubble to burst. As of now, the cryptosphere has risen above the early stages of development and is marching ahead.
Signs of Maturation
The entrance of the institutional investor into cryptosphere as government and central banks have put forward more regulations. Japan has recognized Bitcoin as a legal method of payment. South Korea softened its stance on cryptocurrency and US exchanges have begun to offer Bitcoin Futures. These have cemented belief in cryptocurrencies – if not all, then at least major ones like Bitcoin.
Moreover, Blockchain is widely being adapted by businesses as technology. Major companies are creating their own applications and pushing their own cryptocurrency in the market. Also, Banking industry is widely adapting Blockchain. The technology ensures secure transactions and it is an important aspect of the Financial sector especially Banking.
Recently, Rockefeller family has invested in Bitcoin through Venrock. Other financial moguls like George Soros and Rothschild family have also set their sights on cryptocurrencies. The new wave of institutional investors will be dealing with less uncertainty as the government is offering a steady regulatory framework. And this may mark the beginning of a more mature market.