There’re always new developments in the cryptocurrency industry, but a new report indicates that the market may not survive much longer. According to a report from Juniper Research, the market may soon be reaching a point of “implosion.” The report is titled “The Future of Cryptocurrency: Bitcoin & Altcoin Trends & Challenges 2018-2023 and was only just published this week. The report itself costs $1,250.
Most people would assume that the year has been kind to Bitcoin, based on the headlines. However, the price has dropped significantly lower than the quadruple-digit price last year, which could be a warning to the industry.
In the research provided by the new study, they state,
“If bitcoin cannot make gains in such favorable circumstances, then it is unlikely to prosper as and when these issues are resolved.”
Taking it one step further, researcher Windsor Holden from the study said,
“We feel that the industry is on the bring of implosion.”
Some publications, like Crypto Briefing, wonder if these statements are scare tactics to get attention from the market, selling their expensive research report. Still, there seems to be two sides that seem to rise above the rest of the opinions on the information provided by Juniper Research. Some say that their claims are just a way to show the short-term effect of excitement over the market, but it will be followed by a lull as the market evens out. Jake Choi, Fantom’s Chief Marketing Officer, comes from another stance, believing that the ups and downs are critical to the industry.
“We believe that the volatility in daily transaction volume and value are a given as we are forming a new asset class with cryptocurrencies. Mainstream economists have declared Bitcoin’s ‘death’ time and time again, and it has always come back in a stronger magnitude.”
Choi isn’t the only one under this belief. Head of Research for Brave New Coin, Rafael Delfin, believes that it’s important to look at the progress from regulators and institutional investors.
“While this research does point out metrics that support a bearish scenario for crypto markets,” Delfin said in a statement, “the authors [of the Juniper Report] fail to acknowledge simultaneous positive developments in the ecosystem that support a bullish case for the ecosystem.”
Despite the fact that these new and beneficial developments could open new doors for individuals interested in investing, he added,
“This year, major financial institutions have joined the industry, and high-profile crypto market participants are forming bodies to self-regulate. This will provide transparency, which will pave the way for mass adoption. New regulations around the world are providing certainty and legitimizing stakeholders in the crypto space. This research suffers from a negative bias that wasn’t fully acknowledged.”
If these dangers are as imminent as Juniper suggests, then the natural response would be to figure out what could bring back investment, assuming that they aren’t following Choi’s pattern. There are many countries that are working on establishing certain regulatory measures, and institutional investors seem to be on track for getting involved. All of these things would naturally turn the bear market, but it seems a lot like the rollercoaster-style pattern that the market tends to go through fairly frequently.
One of the arguments made by Juniper to support their “implosion” prediction is the loss of daily transaction volume for Bitcoin, which dropped from 360,000 (end of 2017) to 230,000 (September 2018). During the same nine-month span, the volume of daily trading involving Bitcoin went down below $670 million. Based on the statistics provide in the report, the group believes the results will be even worse for the third quarter.
The report even says,
“Based on activity during the first half of Q3, Juniper estimates a further 47 percent quarter-on-quarter drop in transaction values in that quarter.”
Some of the causes that Juniper credits these issues to include the loss of interest after price inflation of cryptocurrencies, the inability for credit card customers to purchase Bitcoin with their accounts, and the ban from social media advertisements.
“Taken together, this means that there is likely to be less demand, with less funds available to invest in bitcoin.”
The Juniper Research team sees all of these factors as bad news for the future. However, as the industry has proven before, there seems to be plenty that it can overcome. Bullish investors could easily be the ones to pivot the industry forward, even if not for anything but persistence.