What an insane tumble for the crypto market so far this year. Crashing to a total value of just $220 Billion and as low as $186 Billion in mid-September. While all the alt-coins took a massive dive, it was Bitcoin that held more of its value. This signifies a stronger belief in Bitcoin still being the predominant flag bearer of the crypto market, and still the most significant ‘currency’ in the space. Bitcoin is now back to representing half of the entire market. I still think crypto-currencies are NOT suited to be a replacement for Fiat currencies. An encrypted, government backed crypto-currency, that I can see. But we’re not there yet.
This is not insignificant, and something for all to consider. Ethereum took a beating, and now hovers around the $200 mark, while also slipping to the third market size for a short while when Ripple had a blip in September. While it struggles to keep with the pace required for it to remain relevant as the grandfather of the utility token world, we need to consider will the utility token itself hold value going forward as a tradable asset? Consider this, Google’s products are search, maps, ad revenue, payments even. But do you really put a separate value number on their servers, satellites or dropped fibre? This represents the utility of their business. It may be very hard for utility tokens going forward to really be anything investable, while more mainstream investors come into the space and look to have a real stake in the market.
Therefore, security tokens. That is an entirely new world to plunge into. That’s Crypto 2.0, or 3.0… what are we on now, again? The distributed value of a company, is a very powerful development in the world of investments. When literally anyone in the world, can own a fully tradable fraction of a share of a company, that will dramatically democratise value-seeking investment opportunities for everyone. The fiefdoms of funds and VC will deteriorate. We have already seen the evolution of family offices, that no longer give away their money, paying 2&20 when they could have far greater control over their money by bringing investing in-house. The same thing is about to happen for everyone.
So what is holding it all back. Well, regulatory clarity. The SEC has in essence held the evolution of financial markets back by taking so long to come forth and regulate (or otherwise leave be) the crypto-economy. Whether that’s for Bitcoin ETFs or cryptocurrencies at large, a huge wave of potential is now damed behind the SEC, as all other regulatory bodies are hatching eggs waiting for the US to define the playground rules.