Once upon a time, there was a day when everybody who invested in cryptocurrency made a buttload of money. Some even tripled their investment in a few hours. While others were pouring money into anything they could get their hands on, hoping they will hit the next $MAGIC crypto that will make them rich over night. ANY body[data-twttr-rendered="true"] {background-color: transparent;}.twitter-tweet {margin: auto !important;} From the leading 100 #Cryptocurrency only 2 went down in the last 24H and the average gain is over 23%! #OnceUponATime $BTC $XRP $ZEC $ETH — @chichikid function notifyResize(height) {height = height ? height : document.documentElement.offsetHeight; var resized = false; if (window.donkey && donkey.resize) {donkey.resize(height); resized = true;}if (parent && parent._resizeIframe) {var obj = {iframe: window.frameElement, height: height}; parent._resizeIframe(obj); resized = true;}if (window.webkit && window.webkit.messageHandlers && window.webkit.messageHandlers.resize) {window.webkit.messageHandlers.resize.postMessage(height); resized = true;}return resized;}twttr.events.bind('rendered', function (event) {notifyResize();}); twttr.events.bind('resize', function (event) {notifyResize();});if (parent && parent._resizeIframe) {var maxWidth = parseInt(window.frameElement.getAttribute("width")); if ( 500 < maxWidth) {window.frameElement.setAttribute("width", "500");}} There were also some party-💩 who called it a bubble, because they got a bit burned in the early 2000’s. But nobody cared and the craze went on and on and on.. On a more serious note, lately I have read a lot of articles written by some really savvy investors who claim we are now in a ' '. While I do agree with many of the arguments being raised, . Crypto Bubble I think this is not a Crypto Bubble (yet), this is CRYPTOHYPE First, let me explain the on the following example; in the dot-com bubble, there was company called Internet Capital Group which had $70M in revenue, $150M in net losses, and peaked at a $56 billion market cap. While the total market capitalisation of all crypto currencies is now at $87 billion ('only' 1.5x of Internet Capital Group). Moreover, the combined values of stocks in March 2000 on the NASDAQ was at $6.71 trillion; the crash began March 11. By April, the NASDAQ was valued at $5.78 trillion [-$1 TRILLION, in a month]. difference between a bubble and hype Market Cap of All Cryptocurrencies ( ) Source Now, it's good to mention that the total market cap of all cryptocurrencies has since January. However, I believe we are still in the . By that I mean that it will take a while before we get from billions to trillions. Especially, taking into account the current trade volumes and hype surrounding cryptocurrencies. quadrupled hype-phase But I also do acknowledge that this statement might be horribly wrong in hindsight. What really scares me regarding crypto? That being said, there is a bunch of things that scare me a bit about cryptocurrencies (= could cause a 🎈 in the long-run). Below is a list of my TOP SEVEN concerns; 1.🕴️ [obvious] The vast majority of crypto are at this point. How else can you explain coins 10x in one day. If you don't believe me —check the of a few coins investments pure speculations historic trade volumes Historic Trade Volume of $XEM (similar to many many other coins) — 2. ⚙️ The current to users is . How many people you know actually use blockchain protocols, opposed to how many trade crypto utility value close to zero body[data-twttr-rendered="true"] {background-color: transparent;}.twitter-tweet {margin: auto !important;} Blockchains have a $80B market cap and < 1000 engineers have committed code to a working blockchain. — @muneeb function notifyResize(height) {height = height ? height : document.documentElement.offsetHeight; var resized = false; if (window.donkey && donkey.resize) {donkey.resize(height); resized = true;}if (parent && parent._resizeIframe) {var obj = {iframe: window.frameElement, height: height}; parent._resizeIframe(obj); resized = true;}if (window.webkit && window.webkit.messageHandlers && window.webkit.messageHandlers.resize) {window.webkit.messageHandlers.resize.postMessage(height); resized = true;}return resized;}twttr.events.bind('rendered', function (event) {notifyResize();}); twttr.events.bind('resize', function (event) {notifyResize();});if (parent && parent._resizeIframe) {var maxWidth = parseInt(window.frameElement.getAttribute("width")); if ( 500 < maxWidth) {window.frameElement.setAttribute("width", "500");}} — Source: ClassicEtherWallet 3. 🙈 I see projects with hardly , and arguably , raising tens of millions. Seriously, (if you haven’t done it before) open this , open some of the new trending coins and check their website and the team behind the project. You will be surprised any users any tech link 4. [Related to (3)] 👀 I see many people calling themselves crypto-traders . If you want to amuse yourself — open Twitter and search for , $XLM, $ZEC or pretty much any trending crypto ticker. You will see at it's best without knowing what a white-paper is $XRP impulse trading — 5. 💬 While everyone is talking and tweeting about blockchain and the newest , the is really extremely low. Every little announcement = immediate increase in market cap/price, while many of those announcements have little actual impact ICOs signal vs. noise ratio — 6. 🤠 I cannot believe I would ever complain about this; but there is almost . One might argue we are in the no regulation whatsoever Cowboy Days of Crypto — 7. [my biggest concern, also related to (5)] 🐑 Trading cryptocurrencies is — check Twitter, Reddit, Facebook, etc. There are many people trying to hype their own investments, but also many scammers (and I'm not even talking about all the click-bait articles). Given the extreme volatility of most of the coins, this is causing (and will continue to cause) many irrational market moves very social driven 📈 I can't and won't give you any investment tips, but I would like to share my two cents on investing in cryptocurrencies; (A) Try to assess crypto investments [almost] in the same way you would assess investing in an early stage startup. Look at the technology — who uses it now, what are the biggest use cases. Look at the team — what's their motivation, what's their background, and what's their vision. Look at the market cap and trade volumes — try to understand the drivers (is it Japan / Korea, announcement, power-traders, funds, etc.) (B) Try to form a long-term thesis. Intraday trading is shortsighted**. In the long-run you might 100x or even 1000x your initial investment, if your assumptions are correct. ** 😁 Unless you have built a real power-tool (AI, Social Mining, Algo-trading, etc.) for intraday trading. In that case, please drop me an email immediately 🦉And finally, my 7 (wild) predictions By the end of 2017, there will be 10+ coins with market cap over $1 billion We will see some big corrections for hundreds of coins by Q4 2017 (obviously) Regulation is coming. Not only regarding exchanges, but also holding and mainly issuing new coins. I'm expecting the first heated political discussions when total market cap reaches $150 billion People (will) say will disrupt or even end venture capital. But I am convinced, we will see the same dynamics as with Crowdfunding (both Equity and Kickstarter), which works “hand-in-hand” with VC ICOs I'm expecting a lot of inexperienced investors will lose money on ICOs — which will further foster discussions about regulation At the end of 2017, there will be 5–6 clear leaders (cryptocurrencies), which will either benefit from a wide use-case or enjoy backing from big institutional/corporate players ( ) Bitcoin price will continue to surge, and by the end of the year it will pass the $4000 mark. ( ) THIS IS NOT AN INVESTMENT TIP! Even taking into account the latest developments regarding Segwit / BIP 148 DISCLAIMER: I'm very likely wrong about many of the assumptions I share above. And I urge you NOT to treat any of those predictions or opinions as investment advice (as they are just my personal views / opinions). This article is only meant to foster discussion regarding the recent developments in the crypto space, and the predictions are just a fun exercise for myself. Thanks for reading. Written by Dominik Vacikar . and don’t reflect the views of my employer. Views are my own Feel free to contact me at; dominik@hummingbird.vc
