The total crypto-assets market cap has been shrinking since 2018. Yet signals from the global crypto sphere remain positive.
Update on past months
As 2019 began, observers and actors could only sum up the past year as a “crash” or “worst year ever in crypto.” The bear market that was seen as early as mid-January 2018 and confirmed in February has proved to be a strong trend that is not yet finished, as there are no signs of a recovery in the crypto markets in early 2019.
Despite this, the demand for tech people involved in DLTs remains strong. Over the course of the previous twelve months, a lot of people that had entered by chance, perhaps attracted by the hype, have lost their enthusiasm, or have drifted elsewhere. Nowadays, fewer amateur and inaccurate articles are found on the web. Only the knowledgeable and the serious enough have remained.
So, from a hype standpoint, crypto has declined, but the nuclear core is still very (radio)active and convinced. We believe that this community will not shrink any further, but instead, it will start to attract newcomers.
When surveying the remaining “core community” that is still working in the crypto sphere, we could sense that its people share a common feature: they are all passionate individuals who strongly believe in what they do, in the vision of the world that they hold and are trying to solve its actual problems. These individuals are not going to exit it anytime soon; they are going to pursue their ventures, whatever it takes.
There are a lot of clues indicating that embers glow under the ashes. We are going to uncover them throughout this report; one of these relates to volume considerations. Despite the decreasing prices of crypto-assets, the volume of off-chain exchanges, expressed in bitcoin (rather than in fiat), has increased steadily compared with one year ago. Furthermore, the number of on-chain bitcoin transactions has been constantly increasing since the low level of February 2017, to again, reach its highest levels ever. Add to that, there is still volatility in the markets, which proves that bitcoin is very much alive.
Less noisy but tangible applications keep appearing, with DLT-based applications now in production and delivering some measurable bottom-line results. The gains are not yet fantastic, but they are now proven, and companies will make logical decisions to implement the pilots. This is what we think should be carefully monitored, as it is here that we see a pulse.
Right now, the battle in the media between promoters and detractors of DLTs has stabilized. Detractors are no longer bothering to argue over a body believed to be dead, while promoters continue their efforts.
The present situation is summed up well by this quote from Jimmy Song, bitcoin developer and entrepreneur: “Bitcoin price going up can be a very big distraction for a lot of developers. When the price is going up, we’re all thinking about how much bitcoin we have and what we can buy, so it’s very easy to get distracted when there’s a bull market. During a bear market, you don’t want to think about the price that much. Instead, you get down to work and build all sorts of goods and services that might be useful to people, and that’s a good thing.”
So, we will continue to pay a lot of attention to profitable application deployments, but overall, the DLT ecosystem is not in bad shape to begin a recovery sooner rather than later. The expectations of the public and CEOs have also come down to earth. This is a good starting point for a new and hopefully sane cycle.
Check the full version of Blockchain Quarterly (Q1 2019) report for more Insights.