An October report published by OneAlpha suggests that bitcoin has gained strength following the 2018 correction. Based in Israel, OneAlpha is a division of the First Digital Assets Group, which describes itself as “the leading digital assets group in Europe.”
And the Price Goes BOOM!
In 2017, Bitcoin’s price experienced several bursts that saw it peaking at nearly $20,000 in December. The Bitcoin and cryptocurrency hype was at a whole new level. Newbies started flocking to crypto exchanges like Coinbase, which saw over 100,000 additional users join its digital family, and everyone seemed eager to cash in on the now nine-year-old entity that was sure to make everybody rich.
Unfortunately, the hype was short-lived as starting in January, Bitcoin and several of its crypto-cousins began experiencing swift drops in their prices and values. Bitcoin fell to roughly $11,000 by the end of the month and was trading for around $9,000 in February. At press time, the currency has lost roughly 70 percent of its value and is trading for roughly $6,400.
Many had lost funds and considered the crypto space to be something of a sham. Google searches relating to cryptocurrency began to sink, and it appeared that the industry was in something of a dark place.
Look on the Bright Side of Life
But a light has emerged at the end of the tunnel. Despite the consistent drops in both crypto values and prices, it appears something good has come from all this, and OneAlpha is claiming that the present bearish conditions are having a “cleansing effect” on the cryptocurrency ecosystem.
In the report, the authors suggest that during 2017, many people entered the market in an extremely immature way, and that the bearish circumstances have given bitcoin some stability, which could lead to a better, more legitimate market status over its present bubble image:
From our perspective, the prolonged bear market provided the sector with much-needed relief, lowering valuations to a more sensible level. Despite the considerable correction, a large portion of the value represents the future potential of the network rather than its current one. The December 2017 and January 2018 boom and bust had a cleansing effect on the ecosystem, removing many of the speculators and leaving mainly real investors, operators and builders in the market. This is what was necessary to move forward and build a successful ecosystem.
Israel Has Conquered ICOs
The report further states that initial coin offerings (ICOs) have been instrumental in getting the public more involved in crypto (despite several being fraudulent or phony). In fact, Israel can be considered something of an ICO king as the report says the nation raised roughly $600 million in ICO funds in Q3 of this year, a near $20 million increase over 2017’s figures.
In addition, last year saw a total of roughly 350 ICOs, whereas 2018 saw this number increase to 800. The largest ICOs in 2018 included EOS, Telegram, Dragon, tZero, and TaTaTu, though interestingly, ICOs account for less than 10 percent of the country’s overall capital.
2018 has been a very prosperous year for the country. Approximately 140 blockchain companies have come about since January that have raised almost $1.3 billion in new funds. The report says that approximately 60 percent of these funds were ICO-related.
Israel has often been labeled the “startup capital” of the world, having raised over $5 billion in capital for new ventures since last year.
The Prognosis Is Still Good
In conclusion, the document describes the situation surrounding the crypto space as generally positive:
We are experiencing a phase of sobriety and maturation – a decline in retail investment and a more careful, responsible approach from institutional investors on one hand and regulators around the world on the other. A long bear market might be the ideal climate to let the dust settle and examine, both internally and externally, the true possibilities that lay within the cryptocurrency and blockchain ecosystem. Ultimately, the goal is to take a step further and bridge the gap between consumers, traditional investors and blockchain technology.
To view the full report, click here.
Will other nations follow Israel’s lead and become major blockchain hubs? Post your thoughts below!
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