2017 was a watershed year for cryptocurrency. Coins skyrocketed in value, leading to increased media coverage; more media coverage meant greater public recognition of (and interest in) crypto and blockchain than ever before. Optimism flourished, even as it became apparent that such a boom cycle was unsustainable. 2018 has seen the climate around cryptocurrency regain some semblance of normalcy – something that Ethereum co-founder Vitalik Buterin described in an interview with Bloomberg as a “ceiling” after the intense growth of the previous year.
According to Buterin, the so-called ceiling exists because the promotional strategy of blockchain and cryptocurrency’s nascent days – using marketing as a way to drive adoption – is reaching a “dead end,” the byproduct of increased public awareness in the wake of 2017. “If you talk to the average educated person at this point, they probably have heard of blockchain at least once,” said Buterin. “There isn’t an opportunity for yet another 1,000-times growth in anything in the space anymore.”
Crypto markets have declined sharply from their January peak at $828 billion total market cap to $198.8 billion, according to CoinMarketCap. While that decline is certainly precipitous, current figures are still significantly higher than the roughly $17-20 billion market cap at the beginning of 2017. As a result, industry leaders are avoiding hitting the panic button in a bearish market, which early bitcoin investor Roger Ver described to Cointelegraph as “the opposite of a crash,” citing overall gains for bitcoin of 58% over the past year and 1048% in two.
Buterin seems to have a similar perspective, shrugging off the skepticism-fueling news stories behind recent price dips, like Goldman Sachs’ recent announcement that they were suspending their plans for a crypto trading desk – a popular news item in the crypto world that Goldman’s CFO, Martin Chavez, clarified there was never even a timeline for. “I honestly don’t think this stuff matters much,” said Buterin. “There’s honestly a part of me that would be happier if institutional trading of cryptocurrencies did not happen at all for another five years…if all that cryptocurrency is, is this thing that millionaires keep buying and selling to each other, then what have we really accomplished?”
As such, the impending “ceiling” does not mean a death knell for crypto. Greater awareness has enabled the theoretical next step in the evolution of both spaces, says Buterin – the use of crypto in “real applications of real economic activity.” Jehan Chu, managing partner at blockchain investment and advisory company Kenetic Capital, agrees. “There are deep reservoirs of value just waiting for the right trigger,” he told Bloomberg in a text message. Exponential growth may have created unreasonable short term expectations, but as Buterin has described, there is plenty of room for future growth in different ways.
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