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Is Crypto Bubble Popping a Good Thing?

By CIOReview | Monday, March 5, 2018

The total market capitalization of cryptocurrencies has crashed down to 66 percent since its surge in January. This proves cryptocurrency to be a double-edged sword. Initial coin offerings (ICOs) have witnessed the transition from just being the launching pads for cryptocurrencies to a quick way for raising money for any new business. Many of those new businesses offer a service, product, network, or value that is not related to cryptocurrency. Such trends need to be in control until the cost of cryptocurrencies corresponds to the actual business value that the companies and networks provide. This calls for the investors to take a tactical approach to crypto companies and think about their long-term value and should analyze whether cryptocurrency makes sense for that business.

For networks like Ethereum, Storj, EOS, or Dispatch’s latest blockchain technology, cryptocurrency is an important aspect for the interaction between the players in their network. Investors should be able to differentiate between realistic use cases for cryptocurrency and companies that are just attempting to ride the wave.

The explosion of crypto companies with no users in several cases has produced a bubble that needs to pop. The rupturing of the crypto bubble will stabilize and decrease the speculative trend, and will undoubtedly result in more carefulness on the part of investors and regulators. Probably, enhanced scrutiny will not only lessen the number of scams and frauds but also enable the real technologies to succeed. Despite widespread fears, the crash will be in control and cryptocurrency will continue to have considerable value.