March 13, 2019
After witnessing record performances in 2017, two thousand eighteen was a very volatile year for cryptos. Despite disappointing performances, there is a substantial community of blockchain believers, and the interest in the industry keeps growing. This year the record was broken in terms of financing raised for ICOs (telegram 1,7 bn). BitMEX, the world’s largest crypto asset futures exchange saw its volumes explode. It was also a great year in terms of, new crypto hedge funds, institutional money flowing in, new blockchain projects being launched by big companies, major stock exchanges adopting crypto and the list goes on. This year, also, saw some disappointments, waves of anger, underperformances, misleading information. Markets can crash; nevertheless, innovation and evolution are irreversible.
On January 7th, 2018, the total market capitalisation of crypto-assets reached its all-time high with a total market value of over 800 billion dollars after rising tenfold in the last three months of 2017. Since then, the crypto market has fallen by 85% from the high — following the typical bubble burst pattern.
This fall has not diminished interest in the crypto industry and interest has never been greater, with an increasing number of institutions entering the market. Institutional investors are key players injecting a potentially larger trading volume and bringing more liquidity to the market. The market is showing signs of maturity with an average daily volume that was higher in 2018 than in the previous year. Even during the bear market in 2018, total funds raised by ICOs was 1.5x the amount raised in 2017.
Despite the significant losses, it is worth recalling that a token’s fall in price does not necessarily reflect a decreasing intrinsic value. Technological innovation and societal evolution are irreversible. In this study, we examine the year that passed in the crypto market to describe and analyse the reason for, both, its volatility and its continued promise.
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