Analysts’ reports reveal that the bitcoin bubble has perhaps burst, with over 800 cryptocurrencies having “died” because of crash in prices of coins, down to less than a cent. Many of them were scams and did not come into existence as real products.
The only coins which have managed to survive the big wave of the price slide have been coins such as Ethereum, Bitcoin and Ripple.
The reason for these coins to have failed in the markets is their skeletal technology. Most of these were just thoughts of promising profits which were written as white paper and offered in markets as ICO.
These offers equal number of speculators riding the technology trend; Some of them were to make quick profits as far as the trend existed, while others wanted to explore new opportunities and speculated.
Analysts have identified that the prices of these virtual coins has crashed beyond their reasonable expectations, crashing below 70 percent. The price trend for bitcoin was very high in the early part of 2017, until it began to flatten towards the middle of the year before crashing by substantially by the end of the year. The sentiment was largely bearish and cryptocurrencies survived their strengths.
The advantage with cryptocurrencies is that, developers can offer or present their initial idea of the coin through a technical document called ICO, which gives a road map with respect to how the coin will develop.
Other forecasts for the coin are also made. Hence, it is essentially a financial technology document which investors will consider before they invest in the coin. The funds collected from such ICOs are then used to further develop the blockchain technology and eventually the coins.
Thus, the scenario is very similar to a technology startup but investors in ICO become owners of coins which could gain high profits after they are traded on exchanges, eventually.
In this background, the number of ICOs in the past year and half has exceed $3.8 billion and in mid-2018, have already crossed the $11.9 billion mark.
Bitcoin the fair weather coin
The biggest coin to be traded in 2017-18 has been Bitcoin and is the poster-child of the cryptocurrency industry. Its market capitalisation has been the strongest thus far, though this year has been tough for the currency.
The bearish trend headed further south due to the latest South Korean exchange hacks. The ICOs have been risky investment and many of them fraudulent in their character. One of the most talked about scam in ICO has been Giza. It was a fake start up and it was successful in $2 million hack of investor money.
The public offerings as well as venture capital funding have been the bane of the cryptocurrency system. With many company’s being able to build attractive and lucrative ICOs, the un-informed investor has lost out in the biggest financial bubble burst of the year.
With predictions from cryptocurrency stalwart exchanges such as BitMEX CEO, Arthur Hayes that Bitcoin could crest $50,000 by 2018 year end the bubble may set up once again.