We began the second quarter of 2019 with a spring of hope.
April was exciting, at first. The blockchain industry has been in somewhat of the slumber for what seemed like an eternity. Besides the brutal October of 2018, when it felt as if the whole crypto market was melting, we have been on a slow and consistent decline since January 2018.
So, naturally, it felt like a breath of fresh air when the value of Bitcoin climbed almost twenty-two percent in little more than twenty-four hours. We saw some signs saying it was, perhaps, time for the next bull run.
Also, May has been refreshingly pleasant with recent growth in the BTC price. But is it the much-desired bull?
There are a couple of known factors which, in my opinion, contributed to the spring in price. One of them is, as Michael Terpin insightfully stated: “April thaw has been reoccurring year after year”. Another one is the popular halving theory – highlighted here in this Coin Rivet article. Historically, about a year before the BTC halving event, we start seeing a steady and slow increase of Bitcoin price.
So why are we questioning it then? Obviously we are now on the way up. Well, maybe.
In my opinion, there are a couple of meaningful, new factors that we might want to consider when we are making predictions. Since no one knows the future, all we are left to do is find different possibilities, look for new factors, analyse and make best guesses.
One of the factors comes from the observation that the price of BTC has been pulling up the market cap of altcoins (other than Bitcoin distributed ledger electronic money) and tokens (cryptocoins that don’t have their own ledger).
It is not news that BTC growth equals good times for the rest of the market; we have witnessed it, as a rule, many times.
The factor I want to describe is what I call “Reverse Effect” from the above-described dependency. Is it right to assume that upcoming post-ICO correction as the complete collapse of almost all tokens (crypto coins) will negatively affect the price of Bitcoin and delay growth cycle? Is it worth considering that the inevitable collapse of post-ICO companies will, in fact, bring the price of BTC to new lows before halving based growth cycle? I certainly think it’s something to consider.
Nearly every company which used the ICO investment vehicle to fund their project might be that token or cryptocurrency and are experiencing huge problems as they silently disappear from existence.
But the invisible depleting is not how we are going to see these companies go if history repeats itself in all markets as it does – we are going to see colossal blockbuster collapses. Besides apparent issues such as banking, lack of existence of the promised product and whole treasury management cluster disaster, SEC alone will not let violators get away from their firm grip.
With that in mind, let’s move on to the next factor.
I hypothesise that this one could end up being the much needed ‘lifeboat’ – a dinghy that is here to carry us to the ‘Bull Island’. It could be the counterbalancing benefit from the mess of post-ICO damage.
I am talking about blockchain and other distributed ledger technology as an infrastructure benefit integrated into traditional institutions in many different industries.
I believe we are going to see blockchain technology as a separate market cap from cryptocurrencies and token markets. As if to say ‘here is beneficial technology which we can use to better traditional systems, and there is another market which we don’t completely understand’. So we should separate the two.
There are many signs of this technology starting to have traction. We see a constant stream of news about yet another large institution working on implementing blockchain into its structure.
It is also essential to acknowledge that established, non-crypto conferences are contributing a large portion of their time to covering blockchain technology as well. For example Trading Show in Chicago – is going to have a whole track dedicated to blockchain and distributed ledger technologies. It is an Institutional Conference and Expo organised by Terrapin, a global events platform which supports and promotes innovation in many industries.
I was invited to chair their Blockchain track and, of course, accepted such honour with gratitude and responsibility. I am especially impressed by the depth of the topics that will be covered next week in Chicago. We will be examining the practical use cases for distributed ledgers, discussing scalability issues and solutions, diving into digital asset classes and emerging into discussions about global payments and, of course, banking and blockchain technology integration.
So, as you see, the new factors that we must consider when we think about the future of the crypto industry are interesting. My best advice to you would be to look at blockchain technology integration, especially on the institutional level. Spend your time figuring out how you can improve your industry. And for god’s sake, stop chasing the bull, don’t trust fools who want to sell it to you.
If you are building and integrating, soon enough you will arrive at the “Island of Bulls” and find yourself amused by your indifference about the upcoming trip to “Bear Land” as with the foundation that you are building now, your dinghy will become a luxury super-yacht.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.