The crypto-currency market has seen its fair share of volatility over the past year, but now it’s looking like the market is finally getting back to basics with a new trend.
According to a recent survey by crypto-currencies research company Coinmarketcap, more than 80% of cryptocurrency holders think their coins will soon be traded on an exchange, which is a good sign for the nascent cryptocurrency space.
“The last couple of months have seen a surge in the demand for cryptocurrency in the past few weeks, which has been fuelled by a strong amount of demand for bitcoin,” co-founder of Coinmarketamp, Dan Lydon, told CoinDesk.
“This is good news for cryptocurrency, but it does come with a lot of caveats: it does not mean the crypto economy will explode overnight, nor will we see huge price spikes as people seek out new coins.”
Lydon added: “At the end of the day, we see the same coin as the day before.
You might see an altcoin spike, and then you might see a crash, but people will be buying it because it is so new and so new.”
One thing that is clear is that the new trend for crypto-asset trading is a new coin with a strong market cap.
While many other cryptocurrencies have seen their value soar, only bitcoin and ethereum have had the kind of rise that many believe will be seen for the next several years.
“We have seen some pretty big price spikes in the last few months, and it shows no signs of slowing down,” said Dan Lythons co-author of The Crypto Bubble: How Bitcoin and Ethereum Could Transform the World.
“There is no reason for the market cap of the coin to be that high now, and no reason why the crypto ecosystem should be that strong.”
At the moment, the cryptocurrency market is largely dominated by two coins: bitcoin and ether.
People have been putting their money into altcoins and then suddenly there is a price crash. “
A lot of people have been looking for a reason to start investing in altcoins, but the only reason they have been able to do that is because they have had a lot more time to prepare,” he added.
“People have been putting their money into altcoins and then suddenly there is a price crash.
There is no way around that.”
The Coinmarket cap survey has revealed that the most popular cryptocurrency among crypto-stakeholders is the cryptocurrency that was recently named by Forbes as the world’s most valuable cryptocurrency by Forbes’ Bitcoin Tracker.
That coin is called ethereum, which jumped from $12 to $26 on the first day of trading in late October.
The rise in popularity of ethereum has been aided by the fact that more than 50% of its users are in emerging markets, including China, Brazil, and Russia.
That’s a huge increase from the current 50%, which was more than 60% in the first quarter of 2018.
“There is a lot to be excited about for ethereum right now,” Lythones co-inventor, Tom Bevan, told The CoinDesk Summit on Wednesday.
“The platform is built on a really great idea, the token has incredible potential, and there is very little regulation.”
Bevan said ethereum is poised to be a “very interesting asset class in the coming years”, and that there are already over $2.5bn of e-cash assets in circulation in the world.
“Ethereum is really an exciting token to watch in the long run because of its unique capabilities and the fact it is a decentralized token,” Bevan said.
“It has the ability to have a long-term market cap and it is very disruptive, which I think is really good for a token.”
Bevin added that ethereum’s market cap, at $1.2bn, is likely to go up as more investors get their hands on the cryptocurrency.
“As you see it go up, the amount of people who are looking for new ways to invest will be quite high,” he said.
Forbes has already crowned ethereum as the most valuable crypto asset of 2018, and the number one crypto-stock in the US.
Ethereum, like other cryptocurrencies, is also known for its smart contracts, which allow users to manage the flow of funds between their accounts.
The most popular use case for smart contracts is the creation of virtual currencies like bitcoin, which can be exchanged for real currencies like dollars and euros.
However, in order for smart contract technology to become more widely adopted, it will need to be widely adopted by banks, companies, and other institutional investors.
“If people have an idea about how to use ethereum to do something new, they can build on that idea, but if banks don’t have a lot use cases for e-wallets, or if they don’t want to buy into ethereum at all, then people will go to other coins,” said Bevan.