- Speed/Trend of growth
- Hype with the crash or happy end?
- The question of trust
The Rise or Growth
Global cryptocurrency enthusiasts, users, and miners alike have all given various epitaphs and monikers to the advent of blockchain technology and the correlated crypto economy. However, all of the names are subjective at best, as there are endless, unresolved and oftentimes open-ended questions about the cryptocurrency industry as a whole. The colossal growth of some currencies, the flaming downfall of others, seditious fraud and the ever-lingering question of trust are all on the agenda.
Cryptocurrencies are heralded as an alternative to traditional currencies. Bitcoin is the most popular and the most traded cryptocurrency in the world. It is the world’s first decentralized, peer-to-peer digital currency, which has gained mixed reactions over time. But even the seemingly innocuous Bitcoin is subject to various trends and there are many that affect all cryptocurrencies, regardless of their hype factor.
Even though Bitcoin is the most significant player in the market, new coins like Ethereum, Litecoin, and Ripple are emerging. As of July 2017, there were over 900 active cryptocurrencies on the market. New players entering the market always negatively affect competitors. Another important trend is the rising involvement of governments in their attempts to regulate the market and ensure its transparency and ability to be of benefit to national treasuries. Bitcoin can hardly go down, as well as Ethereum and the trend is the rise of the prices over time. Among the trends is the shift to wallets rather than exchanges as Cryptocurrency exchanges are not as safe and the recent slew of breaches has proven it. And one final trend to consider is the slew of new projects coming onto the market, some of which are stillborn, other are downright fraudulent, while some are viable and present interesting instruments for investors.
There is no end in sight for blockchain tech and there will hardly be a force capable of reckoning it in any near future. The massive investments being poured into the innovation are sure to have a pacifying effect on skeptics and other unwilling or undecided investors. Whether asked if the entire concept of cryptocurrencies is a financial scam or is simply based on hype, the answer will depend on the point of view of the specialist being asked, and whether the latter has already profited from the technology.
And, of course, the question of trust remains the most critical. No one can answer for certain whether there will ever be trust in principle on any financial market, but there are ways of compensating for the lack of it. The human factor is undeniable and irrevocable as long as people trade on markets and human nature forces greed to the forefront. Cryptocurrencies have already proven to be utterly devoid of transparency, given the lack of any regulation or legal framework. Speculation runs rampant, as does downright fraud.
However, there are projects on the market that seek to indemnify or mitigate the associated risks. Cryptics is one such project. The concept behind it is to support market participants by providing liquidity on exchanges and a safety cushion for retail investors by creating a platform that connects market players and develops algorithms to predict changes in the value of cryptocurrencies.