Crypto’s $700 Billion Market Cap Loss and Its Impact on the ‘Electronic Cash’ Revolution
One of the biggest unique selling propositions proffered by cryptocurrency is to become the world’s leading electronic payment system, rivaling both MasterCard and Visa, and even possibly edging them out.
Unfortunately, that dream is beginning to look like a distant mirage, what with bitcoin and other altcoin’s value plummeting drastically and resulting in a $700 billion loss in market capitalization.
The year 2018 has seen cryptocurrency market crash from an all-time high of over $830 billion to less than $140 billion. While bitcoin still dominates the market with a 52.5 percent market cap, it’s still not enough to take on huge, established payment processors like Visa.
In fact, the top 100 cryptocurrencies’ market cap is less than 50 percent of Visa’s current market cap at the moment. Yet, there was a time when it was easily thrice the value of the credit card firm.
Possible Electronic Payment Processors Clash?
This drastic turn of fortune for the cryptocurrency market has clearly affected the optimistic projects and outlook of crypto advocates who believe that some of the crypto projects can give leading credit and debit card companies a run for their monies.
As it stands, many analysts believe that these established payment systems have set a pretty high standard for cryptos to meet up with.
While many of these cryptos have impressive potential –like ethereum hoping to execute 22,000 transactions per second- none has matched the current performance and output of the established traditional payment systems.
MasterCard and Visa are still global leaders and may retain those positions for the foreseeable future, if crypto’s current outputs is anything to go by. For instance, bitcoin is only able to process 7-8 transactions per second, while Visa processes above 65,000 transactions per second.
Even more, transactions carried out by bitcoin are merely for investment purposes instead of vacations, luxury goods and regular daily purchases like Satoshi Nakamoto imagined. So, even though there’s a lot of effort going into making cryptocurrency transactions faster, the results are still limiting.
Many projects though are working on this assiduously and hope provide a solution pretty soon. So, as laudable as those projects might be, it might be a while before we’ll see any tangible progress or output similar to the leading global credit and debit card companies.
Bitcoin’s price slump has seen it lose over 75 percent of its value this year. Will it bounce back and the crypto sector recover? Only time will tell. Till then, all investors and traders can only keep their fingers crossed.