This week’s cryptocurrency update sees a trading market in decline and a community reacting to the implications that this may hold for the development of blockchain technology and the innovations it supports.
First, to the market where the last seven days saw prices dropping almost universally. This time last year, it would’ve been hard to imagine for even the staunchest sceptic that the cryptocurrency market’s value could be slashed in half. Few industries of any variety could survive such a mauling (at least not without hefty state intervention) but here we are and it’s not all bad news…
Despite jumping 3 billion US dollars in less than an hour last Saturday the market had rolled backwards by Sunday afternoon, losing close to 5 billion USD in a comparable amount of time. In the days that have followed, prices have dipped by around 1.6 percent, leaving the total cap at about 120 billion USD at time of going to press.
Bitcoin lost roughly 2% across the week, before gaining 1.33% in the last 24-hours. Its price sits at a bowed-but-not-broken 3,627 USD. Not bad, considering the US government shutdown has stalled SEC discussions of much-anticipated Bitcoin exchange-traded funds (BTC ETFs) indefinitely.
Ethereum was down 4.59% over the week and has only managed to rally slightly, gaining 0.81% since yesterday. Its closest rival, Ripple, lost ground to the tune of 3.3% and only managed a 0.51% 24-hour gain in response.
Commentators have been speculating as to what this cooling in the market really means for the sector. The bad news is that the free-for-all we saw in late-2017 probably isn’t coming back. The good news, on the other hand, is high prices and technical innovation don’t necessarily go hand in hand. In fact, it could be argued that, with the circus leaving town, the inverse might prove true.
Edith Yeung of 500 Startups clarified the theory when she said;
“I think it’s a really good thing that now the crypto secondary market has, in some way, fizzled out because the people who are here now building are the ones that really believe in the technology.”
So, yet another dour cryptocurrency update then? Well, perhaps but only if your focus is solely short term monetary gain. Investors with a little more savvy may see this low period as a time to separate the wheat from the chaff and speculate on quality rather than quantity.