Welcome to the 14th edition of crypto roundup brought to you by HEAT.
The Boring is the Exciting
So it is almost undeniable now that we are entering a 'boring' period for cryptocurrency. No fancy splashes this fortnight. No 1000% moves. Just a steady up and down movement of the markets. This is a relatively rare phase this year. Especially the middle of 2016 was punctuated by a lot of ICO hype. Now things seem to be cooling down, as they always do.
However, amidst this calm and boring markets will emerge the better projects and cryptocurrencies. Now that the pump-and-dump coins have much less oxygen to sustain their fire, it is the truly innovative ones that will stand the test of time. In fact, flat markets are more dangerous to these pumps and dumps than a bear market. They are, after all, run by the typical traders who make money with volatility.
So let's look forward to consolidation now. Things were crazy before, but now they have cooled down, at least a bit. So let the working teams continue their work without market pressures. The best coins will win out in the end, but only for the long-term holders.
If it wasn't clear, we consider HEAT to be of that category (yes, no bias at all). It is very rare for ICOs in 2016 not to release a coin even after several months. This will naturally cause some angst among the shorter term speculators. However, for the long-term holders, this is great news. No market pressures for the devs to create their vision, which is what the tokens should be for. In fact, we see this model as the more viable one for the longer term. Ambitious projects that are hard to execute and pull off, but have disproportionate rewards to the long-term holders because it can potentially change the landscape. Big bets. That's the whole appeal of this crypto space, after all.
If you're still an investor at the end of 2016, listen to people who have been through more brutal cycles of the past. If you're a long-term investor, look for the projects with the most ambition and potential with a driven team, not the one that lists the token for 2x the quickest on the exchange. Luck is not an investment strategy.
The Impact on ICOs
The ICO market had a wild ride in 2016, with tens of millions of dollars raised by all sorts of projects. The total ICO market, close enough to hundred million dollars, has emerged as a significant force in the investment world today, not just in crypto.
However, with a general slowdown in the crypto market, the ICO market cannot be far behind in taking a hit. The number of new ICOs getting millions of dollars in funding has gone down significantly. To be sure, there are still a healthy number of ICOs planned, but the investor appetite is waning already, and people don't seem to get the first-day 2x-5x pop, so they are quitting the game.
However, this has impacted some more serious projects too. Take Inchain for example. Irrespective of whether you like the idea (crypto-insurance against site-wide hacks) and believe in its potential, it was a novel use-case. Earlier in the year, it would have most likely raised enough money. However, in this environment, it failed to reach its goal. Here's the email they sent out to announce the end of the ICO -
This will, by no means, foretell the death of Ethereum-based tokens, but even after The DAO debacle, it seems like Ethereum-based tokens have gotten a little ahead of themselves. This is probably a much-needed correction in the ecosystem.
About Inchain, the goal was $1.75 million, but they raised only around $0.2 million. Refunds will cost 0.8% and miners fee. Ouch. Again - that's what crypto bear markets do.