There are anticipations that crypto companies will struggle to stay alive in 2019. According to industry observers, the falling prices in 2018 depleted the necessary reserves that was needed to fund their businesses.
A lot of companies in the cryptosphere are already laying off workers, shutting down operations, and scaling back plans during the bearish situation.
According to former Facebook employee, Anthony Maguire, he thinks one will definitely see companies go bust. Maguire, a former Facebook employee who now owns a blockchain advisory and education business focused on emerging markets. He mentioned that, tech startups go bust all the time. Sometimes, people just forget about them.
From Grace To Grass
In 2017, cryptocurrencies became famous. This was majorly due to bitcoin’s price and the explosion of initial coin offerings (ICOs). In 2017, the price of bitcoin (BTC-USD) increased. This attracted much more investors to the market, majority of them were interested in making a fortune from the price rise. By December 2017, bitcoin was worth about to $20,000.
Later on, the initial coin offerings (ICOs) exploded. This led to startups to issue their own digital tokens, structured a little like bitcoin, to fund their business. Most startups traded their tokens in exchange for Ethereum, the second biggest digital currency. At the end of 2017, there was over 1,000 crypto tokens in circulation. But, there have been a change in fortune this year.
In 2018, Bitcoin’s price fell steadily and it now trades around $3,800. The market fell because of the lack of new investors hoping to make money. Without speculators, owners of bitcoin found little demand or use for the currency.
Simultaneously, the prices of most ICO tokens also collapsed. This was because the projects have failed to deliver on their promises. According to head of OTC trading at BlockEx, Edd Carlton, there’s a 90% s***coin marketplace. This is where people have lost money because they later realised that there is no utility.
Years Ahead Always Give Advantage
Importantly, the price of Ethereum (ETH-USD) also fell from over $1,000 in January 2018 to around $130 today. This will badly affect startups. It means that startups that sold ICO tokens for Ethereum will have their money fall.