2018 was crypto’s year of reckoning, but there’s hope ahead
2018 has been a tough year for cryptocurrencies.
As I write these lines, the prices of major cryptocurrencies such as Bitcoin, XRP, and Ethereum are the lowest they’ve been in over a year. The price decline, which started roughly in January, has been relentless: The cryptocurrency market cap shrunk from its all-time high of about $830 billion to just over $100 billion. The sentiment on crypto-related chats, groups, and subreddits is grim: Everyone expects the prices to fall further. Some vocal critics, like Nouriel Roubini, are gloating over what they see as annihilation of the crypto bubble.
Perhaps even worse than the falling prices is the uncertainty over where crypto’s headed next. Bitcoin (and its derivatives) failed to become the new money (or even new gold), and it doesn’t look like that’s changing anytime soon. Ethereum’s vision of becoming a global, decentralized computer is plagued by obstacles and likely many months away, and the ICO craze that fueled its growth appears to be over, at least for now. And numerous cryptocurrency projects, even well-funded ones like ConsenSys and Bitmain, are laying off staff due to the cryptocurrency market’s decline.
And yet, there’s hope ahead.
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While the cryptocurrency bubble appears fully deflated on most charts, if you look closely, the prices of Bitcoin and Ethereum are still far, far above than what they were just two years ago.
Total market capitalization of cryptocurrencies.
Image: coinmarketcap.com
In May 2017, the value of Ethereum and Bitcoin soared, propelling the total market cap of crypto to $80 billion. And back then, the experts were mostly in agreement: That sort of growth isn’t sustainable, and the entire space is likely in a bubble. The bubble kept growing, but to be fair, there was no sane reasoning behind that growth except greed and the type of reckless optimism that borderlines with madness.
This could, of course, mean that the prices could plummet even further. But if you look at the cryptocurrency space as an exciting, new technological playground instead of a big casino, you’re probably well aware that even the current prices aren’t earned. Cryptocurrency might one day disrupt finance, online betting, gaming, logistics, and content creation, among other industries, but none of that has happened yet.
The sentiment
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