The Declining Blockchain Currencies

It has been something of a rougher than expected year for Block Chain currencies. From being worth $20,000 at the end of 2017, Block Chain currencies had plunged to less than $6,000 by the summer of 2018. Bitcoin itself is down 3% on a 24 hour basis and has lost 50% of its value since the beginning of 2018 and a whopping 60% percent of its value since its December high. Back then, as the world began to take its first steps out from recession and looked forward to a period of growth that was to be more robust with greater inflation, bitcoin rose rapidly in value. Then the growth stunted before dropping spectacularly. Because of this admittedly concerning plummet, experts have warned that Block Chain currencies have now entered panic mode. Bitcoin itself dropped its lowest value of the year only a month ago, while Ethereum too has suffered, dropping by 25% at the same time. This is very far from the “Bitcoin will be worth more than gold” prediction made by experts in their field. By its very design, its value will be always be cyclical after all.

So, why the drop? Well, the main reason that Block Chain currencies are declining is because investors are using the frowned upon method of fundraising by liquidating their Block Chain holdings that were earned through coin offerings. In addition, due to Block Chain currencies remaining largely unregulated, there is no option for central banks to step in and deal with a drop in assets as they would with domestic currencies. You can feel the negative change in the air in the Block Chain currencies online forums. Only a year ago, investors were full of positivity, shooting down any detractors that dare question crypto’s potential, now attitudes have tempered overwhelmingly.

While the market price of Bitcoin, Ethereum and the other cryptos might well be in crisis mode, the regulatory, business, and technological infrastructure surrounding them are all booming. This is to say, that although Block Chain technology has declined sharply, its market share has actually increased. It is also worth noting that Block Chains have, in the past, suffered from something of a trust problem. Numerous failed block chain start-ups have made investors reluctant to commit or recommit to the technology having been burned before.

Over the next year or so, well placed Block Chain currencies are expected to experience a rebound, however unlikely that might look at the moment. In fact, if you listen to the bitcoin faithful, the digital currency could well surpass its record highs from the end of 2017. The nature of crypto always means that this new and exciting currency will flutter in value but investors shouldn't worry just yet. In fact, more and more trusted sites, such as online poker providers, predict that the currency will flourish in the long term.

Some experts in the field are even predicting that, despite its current struggles, Block Chain currencies will prevail and replace 25% of national currencies by 2030. Already, banking card providers, Visa and MasterCard, have made it more routine to use Bitcoin for everyday transactions, especially outside of the US where, in places, payments infrastructures still are not very well established. Facebook, too, announced that it would form a blockchain group and even create their own Block Chain currencies with which to trade with on their site bypassing the need for a government-backed currency.

Such a move is known as the development of Initial coin offerings (ICO), where a company issues its own digital token dependent on the blockchain. The idea being that once the company launches its own application, users require customized tokens to access features or purchase services. What’s more, ICOs raised more than $5.6 billion in 2017. A reason to be optimistic if ever there was one.

Kik, the popular messenger app, raised $100 million for an ICO of its own in order to fund its crypto-token Kin which it believes will let it develop a climate that rewards developers financially without the need for commercial advertising. Since then, Kik have also launched Kinit, an independent app where users can spend their Kin tokens in different online stores, again without annoying ads. Even more recently, Augmented Reality vanity platform Perfect365, which boasts more than 100 million users, has announced a collaboration with Kin that plans to reward its mainly female user base in Block Chain currencies for completing surveys and other tasks on Perfect365. Both Facebook and Kik have a solid customer base which should ensure that their Block Chain currencies should succeed as the very model of these currencies relies on attracting users to a particular platform. This has been part of the problem for Bitcoin and Ether as well as lesser known models for that very reason. Without a good amount of users to circulate their token, the value will plummet. By utilizing, block chain in their products, the popularity of the technology should rise sharply.

Now, a healthy number of traders, investors and analysts are all once more predicting again the crypto market might be about to enjoy another boom period. After all, the price has fluctuated widely in the past and people in this industry have seen such movements multiple times. In 2014, Bitcoin’s price dropped from around the $1,500 to almost $200 mark that left people questioning its long-term potential. Now, as then, it only needs a few sparks globally to breathe new life into the market. While, Block Chain currencies may not make headlines like it used to, and certainly at the moment not the right ones, there is plenty of reason to ignore the doom mongers and look forward to a bright future.