RE: Bitcoin now accounts for less than half the market cap of all Cryptocurrencies
Thank for sharing! I am interested to find out your thoughts on whether we are in a cryptocurrencies bubble now? Here is the DATA which support this my assumption: it looks that we are entering bubble territory for a vast majority of alt coins (except Bitcoin probably). Just think about and analyze the following facts:
At least several dozens alt coins market caps skyrocketed 300%-4000%(yes, four thousand!) recently just over last 2 months!
The beginning of sharp increase happened around middle of March of 2017 for ALL alt coins!
Yes, some alt coins sharp increase is logically justifiable. For example, Ripple XRP: http://www.cnbc.com/2017/03/01/japanese-banks-plan-to-adopt-blockchain-for-payments.html . Maybe there are couple other alt coins where this huge growth is also justifiable.
But for vast majority of other alt coins nothing has changed drastically during the last 2 months! At all! Neither in their technologies development, nor in their business development! But nevertheless, their market cap skyrocketed 300%-4000% in just 2 months!
The only explanation which comes to mind is that huge amount of new capital is coming to cryptocurrencies market. Probably these are the people/investors who have heard about the first wave of Bitcoin and Ethereum successes, and they have a FOMO (fear of missing out) now. They don't have deep understanding of cryptocurrencies space and their differences, but because of FOMO they still invest in all other alt coins hoping to hit jackpot!
Does it remind you anything? Yes, exactly, dot com bubble of 2000 looks very similar!
Therefore, I would expect some kind of significant downside price correction within next several months for the majority of alt coins. Would you agree?
I would agree with most of this except for your timing prediction... This could last a heck of a lot longer than a couple months. The dot.com bubble you referenced lasted for the better part of 5 years. This looks more like the beginnings of something than the top of it, but that is just my gut feeling. I think we could see prices go a lot higher before we see a huge crash.
On Steam this will also have negatively affect too?
Perhaps. However, steem has an entire social networking site behind it that is just getting starting. Hopefully steem has many use cases besides just as a currency. If that is the case it should have many factors helping support it when times get lean.
I am not sure about steem. If, for example steem.com has exponential users growth and therefore exponential steem adoption, then it might not crush and its growth rate is justifiable. But if, users growth is just linear but steem price is exponential, then we are going to see a correction. Steem.com owners have much better picture than we do.
Good point. But crypro market is different from stock market as well. Main difference is amount of capital invested in those markets. Crypto market is tiny compared with stocks market. If you look back at Bitcoin bubble in the end of 2013 (Bitcoin was around $1K at that time), then you will see that it crushed just within 1 year to around $200 for Bitcoin (80% drop). I would expect similar timing for many alt coins bubble burst.
Yes the markets are different sizes and things move a lot faster now than they did in the late 90's. However I still stick with my premise that this is more of a shift than just a flash in the pan bubble. Time will tell I guess.
@alex13, drawing parallels with the dotcom bubble is easy but we need to understand why there was a dotcom bubble in the first place. Huge money went into dotcom startups in 2001 but the real problem was the penetration and the lack of monetization. So it was only a certain distance that you could go with the cash burn strategy.
Cryptocurrencies and the blockchain technology tied up with them has a solid business case for making hassle free transactions, cost savings, elimination of intermediaries. The market participants (similar to user penetration and acceptance) amount into billions and possibly means trillions of transactions. And we are talking Global here. The basic business case of it is very solid here and all the altcoins and the blockchain technology are addressing problems in very existent market, and solving real pain points. So while bitcoin is consumer to consumer, consumer to business and business to business, Ethereum is making it's presence felt with it's smart contracts based distribution ledger. Ripple has taken it to a very different level with addressing the pain points of the inter-bank and cross border global settlements and payments. The adoptions are increasing, and so will the value of these cryptocurrencies. I don't rule out huge volatility in the short term, but if you are good with a long-term play, this is the legal tender of the future.
Maybe you can read my article as well and let me know your thoughts - https://steemit.com/cryptocurrency/@knowledgesausage/can-xrp-ripple-be-your-ticket-to-milliondom
To me, too, this seemed unfounded, but I did not conduct such an in-depth analysis as you
Thank @alex13!
You are welcome!
I agree with you, as I wrote in my remark.
Bitcoin is NOT in a bubble now.
The criteria for a bubble is easy explained by Greg @marketreport in this his short post.
https://steemit.com/bitcoin/@marketreport/are-you-waiting-for-the-bitcoin-bubble-to-burst-don-t-hold-your-breath-by-gregory-mannarino