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The big bear market 2018, memories of 2014 and a comparison

The big bear market 2018, memories of 2014 and a comparison

The recent bear sentiment in the cryptosphere is everything but appealing.

If you decided to buy into Bitcoin or another crypto-asset around Christmas you likely lost 50-70% of your investment which is a catastrophe if you compare it with a normal asset or a stock.

In cryptoland, however, things work differently.

Back in 2013 and 2014 when the first big crypto bubble catapulted Bitcoin to slightly over $1000 the investment mania, the FOMO (fear of missing out) into cryptocurrencies started and is our daily companion since then.

One could say that everything we see on the charts today is completely the same as back in 2014 with the difference that today, billions of dollars more are in circulation.

Today is surely a day where we could assess the market and say: “it’s almost only going up from here”, and at this point, we might forget that we still see a total market capitalization of over 300 billion Dollars.

So technically spoken, we are still in a crypto bubble, compared to 2014.

New investors tend to overlook the fact that the overall market-capitalization has grown so much, that even minus 20% still make it a win situation for those who invested before 2017.

December 2016

For reference, the total market-capitalization December 2016 was lower than 20 billion Dollars (as a reminder: that includes all cryptocurrencies of coinmarketcap):

If we complain that we’ve fallen to under 300 billion capitalization we should be grateful that we don’t fall back to 17,7 billion cap (Dec 2016), which is just a bit more than the total value of Bitcoin Cash at this point.

Since the market has fallen tremendously for three months now, many chart analysts praise to have found the bottom of the bear at these levels but since we still hover around 300 billion cap, we should look at the reasons for the extremely high value of all combined crypto projects, instead of relying on technical chart analysis.

And the reason is simple: adoption, the most valuable asset of investors.

Adoption

Adoption relies on the following:

-unique features improve business models that attract new companies.

-an ecosystem creates a flourishing market that attracts investors.

-stable characteristics of a technology improve trust.

-improvements to life are visible to the layman.

-proper education of pro and cons for everyone available, not only in English.

-decentralization improves conditions against a single point of failure, that also applies to flash-crashes of the market.

-technologies and involved actors should be transparent and open for audits and reviews.

Today

Every single point for adoption has vastly advanced over the last 4 years a result of development and diversification. Of course, no project is perfect and reached its destination, but in cryptoland investors invest in the expectation value and not into the value of functionalities or properties right now, like oil or noble earths.

Compared to the long bear market beginning with 2014 when the hack of Mt.Gox triggered a long period of low prices and negative press about Bitcoin et.al, today, we have a serious level of adoption and many promising features that can be beneficial for everyone.

We can expect more than in 2014.

We have higher trading volume, way better options to exchange fiat-currencies for crypto-assets, way more options to spend cryptocurrencies on real-life products and most importantly, we have companies that explore the benefits of these new technologies.

Distributed ledger technologies are here to stay, the recent regulations that have been declared in the US, the European nations, and South Korea are everything but bearish.

It shows that the world has become aware of the perks and possibilities of blockchains and DLT’s.

Therefore I don’t expect a year lasting bear market like in 2014 because the sentiment clearly has changed.

Now it’s up to people in this sphere to work on transparent progress that solves some problems of the world.

My personal take on investment is: follow the best technological features and adoption, the rest is gambling.

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