The creator of cardano portends that the cryptocurrency markets will undergo a serious correction that will help weed out projects with poor fundamentals.
The 2017 market run-up injected hundreds of billions of dollars worth of capital into the cryptocurrency ecosystem, but many industry observers believe that the rally has been indiscriminate and could trigger a crash as investors gradually recognize that many projects have poor fundamentals.
“My personal opinion is that we’re going to see a consolidation after a crash,” ethereum co-founder Charles Hoskinson told CNBC in an interview Friday.
Hoskinson served as chief executive of the ethereum project during its early stages in late 2013 and early 2014. At present, he heads blockchain research firm IOHK, which is best known for its development of Cardano, which currently ranks as the fifth-largest cryptocurrency by market cap.
The developer said that he believes the sheer number of cryptocurrencies with poor fundamentals makes a crash inevitable, as many of these projects are wildly-overvalued and ultimately unsustainable.
The latest punching bag for analysts who share this opinion has been Dentacoin, a self-described “blockchain solution for the global dental industry” that currently boasts a market cap of $1.5 billion.
“What’s going to occur is a lot of these ventures that don’t have strong fundamentals, don’t have good tech, or just unrealistic projects, they will eventually run into some major wall they can’t quite overcome,” Hoskinson said. “They will fracture up and you will see a lot of them are certain to fail.”
This, however, could not be realized for some time, as many projects raised large amounts of capital through initial coin offerings (ICOs).
Eventually, though, Hoskinson predicts that the market will undergo a crash that will consolidate capital in projects with stronger fundamentals, strengthening the industry over the long-term.
Early Ethereum Advisor Still Bullish on Near-Term Outlook
Early ethereum advisor Steven Nerayoff, however, foresees a much brighter near-term outlook for the cryptocurrency markets.
“The entire space is increasing. There is huge interest by the public and there are more areas in which the public can invest, even in bitcoin, so you could just see an expansion in the entire space,” Nerayoff told CNBC on Monday.
Nerayoff, who describes himself as the “architect” of the Ethereum ICO, predicted that the ethereum price could triple over the next year, which may or may not lead to the long-anticipated “flippening,” after which ethereum would rank as the most valuable cryptocurrency.
Featured image from Shutterstock.
Follow us on Telegram.
via CCN https://www.ccn.com
January 9, 2018 at 01:37PM