The market capitalisation of cryptocurrencies reached a record high of $835.7 billion on January 7th, 2018 at 11:17 UTC. Since then, there has been a decline in cryptocurrency prices which, according to today’s figures, is close to 84%, suggesting the bursting of a speculative bubble.
To give an idea of the size of the market a year ago, the aggregate value of cryptocurrencies in circulation rivalled the M1 money supply of South Korea, the eleventh largest economy on the planet.
For some it was the bursting of a real crypto bubble, just think that the current capitalisation of the entire crypto market, around 136 billion dollars, is below the market cap of XRP which, at the beginning of January 2018, exceeded 149 billion dollars.
The drop in the entire crypto sector came weeks later than the drop in bitcoin prices, which suggests that those capitals passed from the main cryptocurrency to altcoins and then out of the ecosystem, thus triggering a classic dynamic of a bear market.
A year later, the main altcoins most affected by the fall in prices were NEM which lost 97% of its value, Bitcoin Cash, Cardano and NEO which fell 96%, Zcash 94% and Litecoin and Monero which lost 90%.
However, the decline in cryptocurrency prices has not prevented the entire industry from making important progress in several aspects: Lightning Network continues to evolve significantly, there is a greater focus on ICOs, both with a more objective and rational approach towards projects and with greater investor protection from scams.
In addition, despite the bursting of the so-called bitcoin bubble, the work of developers continues to improve the technical infrastructure of various projects. While in regards to the trend of prices, the likely entry of institutional investors thanks to dedicated financial tools, will probably lead to greater maturity in the market as well as to the end of the bear market with increases in the prices of cryptocurrencies.
Moreover, blockchain related projects, while persisting a high component of hype for marketing purposes, continue to grow in importance, both from an industrial point of view and attention from policymakers.
Ultimately, despite such a significant drop in crypto prices, 2018 saw many developments for the entire sector, it wasn’t a wasted year after all.
