Wednesday, August 15, 2018

As Bitcoin regains more than 50% of the cryptocurrency market, are we potentially seeing an extinction event for most of the rest

While cryptocurrencies in some form may one day become the new paradigm of future finance, history will show that this current crop of digital assets will go down as a meteor that blazened the sky for a short time, only to dissipate when it ran out of momentum.

In 2017 the cryptocurrency sector saw one of, if not the greatest single asset moves in the history of the market, creating millionaires and even billionaires from just the investment of a few thousand dollars.  But just as fast as the market cap for crypto's rose from below $30 billion to nearly a trillion in the course of just 12 months, that same sector has now lost over 80% in the past eight months, with many of these crypto's now standing on the precipice of complete extinction.

Chart courtesy of onchainfx.com
A reckoning coming to the cryptocurrency markets, an “extinction-level event” that’s poised to wipe out 90 percent of the more than 1,800 coins and tokens that aren’t named bitcoin. 
That’s the prognostication of Xapo President Ted Rogers, anyway, who said that the impending altcoin bloodbath will provide discerning investors with an incredible opportunity to load up on bitcoin at a discount. 
“We could be in the midst of the extinction-level event for “cryptoassets” that many maximalists have predicted. 90%+ of @CoinMarketCap list will disappear eventually – might as well happen now,” Rogers wrote on Twitter. “Meantime, lower BTC price means incredible opportunity to buy more #bitcoin.” - CCN
The drop in value of nearly 90% of cryptocurrencies has even allowed Bitcoin to move back over the 50% threshold of market cap despite the fact that it too remains more than 60% below its all time high.

Because of the popularity of cryptocurrencies in 2017, nearly everyone and everything sought to tokenize itself under the banner of the cryptocurrency mania.  But in the end as with all things, if there is nothing underlying the foundation of any particular asset, its intrinsic value will always revert back to zero.

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