Recent Cryptocurrency Downturn Make Wipe Out “Lesser Coins”
If you’ve been considering getting in on the cryptocurrency market, but are overwhelmed by the sheer number of options contained therein–and with good reason; a quick check of CoinMarketCap says there are 1,855 as of this writing–there may be some relief coming up soon. A new report sent our way from Syracuse University says that there may be a shaking-out afoot that will torpedo many of the lesser altcoins and thin the market.
The word from Syracuse University associate professor of the School of Information Studies, Lee McKnight, notes that several cryptocurrencies have lost nearly half their value. With 58 coins still holding market caps of over $100 million, though, that could be good news for the overall market. McKnight acknowledges the possibility that these liquid coins make just have speculators piling in and “taking a chance”, but this also may represent an excellent opportunity to buy in at comparatively discounted prices.
What’s more, McKnight expects a lot of field-clearing to take place. You can tell that much from his remarks, as he said: “I expect most of the 1833 listed crypto-coins will only live on immutably beyond 2018 on the ‘Way Back Machine of the Internet’ archive before long, as the reality of the brain-dead easy (for geeks, students, and scammers) creation of a new coin becomes better understood. But that is normal in a time when new technology and markets are emerging….”
The process McKnight describes is fairly standard for new technologies in general. One big winner draws in a host of competitors, and eventually, the market gets so glutted with competitors that the lesser ones get weeded out in favor of the stronger ones. Obvious, McKnight isn’t talking about bitcoin itself here; bitcoin’s got way too much going for it to just fold up and run off. There are institutional players looking to get into bitcoin and that’s going to keep the price stable and / or rising for months. It’s all the little coins, the stuff you never hear about on the news that’s going to get pasted.
Still, in the end, the cryptocurrency market itself won’t die. It will be rendered unrecognizable against its current form, though, and likely pared back so far that it’s a shadow of its former self.