Welcome to our 2nd crypto roundup of 2017 brought to you by HEAT. We'll do these roundups bi-weekly going forward (once every 2 weeks).
Price Speculation, Sure, But Real Value is in Development
As the price of Bitcoin and Ethereum both rise, we are seeing new projects being a bit starved of new money. This is not unexpected - if you believe the underlying Bitcoin or Ethereum is more valuable, you'd not want to part with it to fund some project that could fail. This isn't a new phenomenon, but it is interesting to note how soon these cycles change. Just last month, Melon sold out its ICO in under 10 minutes, a record even for this crazy crypto-economics. However, look at WeTrust, another Ethereum-based cryptocurrency that opened to a lot of hype.
The project has raised a very respected $1.5 million or so, but nowhere near the records the team was expecting.
The point of all this is to say that the ICO timing matters. Like, a lot. It is important to understand the market into which you'll launch your ICO.
However, there are daily fluctuations in crypto that would make the stock market seem like a government bond. But there is method to the madness - as Buffett would say, it is the case of a man climbing up the stairs with a yoyo. Over the long-term, good projects win out. With the recent price drops as Bitcoin rises in value, it is not surprising that the weak projects will die out, and the promising ones with real technology and innovation will win out - but only in the long run (that's where we see HEAT going, but of course we're biased!)
A Week Dominated by Bitcoin ETF
Bitcoin continues to suffer from a split community that is highly divided along political and technical lines. This is especially the case when it comes to deciding how best to scale Bitcoin. Already, the average fees per transaction has reached $1. That's significant. No longer is the promise of Bitcoin being a cheaper alternative to the banking system true. Of course, projects like HEAT provide a much more scalable solution for blockchains, but it will take time to be adopted by the market.
However, it is possible that Bitcoin indeed will become a store of value, with only the large value transactions performed on-chain and the rest over second-layer solutions.
If that has to be true, the Bitcoin ETF will help a lot. That's going to be the easiest way for Wall Street to get into Bitcoin and cryptocurrencies. Also, if the Bitcoin ETF gets approved, it will pave the way for all other sorts of ETF and financial products. I suspect the ETH ETF won't be to far behind.
If it gets rejected, expect the price to drop sharply, but remember that the rejection will likely give insights into what the SEC is thinking. Possibly, the other ETF applications (SolidX and GBTC) will be able to learn from COIN's failure in that case and improve their application.
The next 2 weeks will no doubt be dominated by the COIN ETF. Remember the date is 13th March for the SEC to make the decision. Expect some wild price swings and volatility.