2018 is The Year of The Cryptocurrency
?>Cryptocurrencies have been around for several years but public awareness and coverage of them in the mainstream media only really stared at the end of last year when Bitcoin, the most popular and the largest digital currency by market capitalisation, reached a record high. Its value soared more than 12-fold and Ripple is the best performing cryptocurrency of 2017, registered an astonishing 37,000% gain.
Many in the financial services’ industry thought these currencies would be a fad, something that would remain consigned to a corner of society and used only by geeks or enthusiasts or the dark web, however, digital and cryptocurrencies now widely used and the more established tokens are starting to attract institutional capital. Many governments, including The Bank of England (BoE), are planning their own digital currency at some point but Mark Carney, the Governor of the BoE has slowed down plans for the UK’s own state-backed digital currency because it would be popular and wholesale adoption will speed up the demise of the high street banks altogether.
The sudden popularity of cryptocurrencies has led to regulatory authorities scrambling to catch up with the market and implement safeguards for users. Regulation is fundamental to enable the crypto ecosystem to develop but the days of cryptocurrencies being used by just a few speculators are long gone. There are now more than 200 digital currencies on the market with a combined market capitalisation of $600 billion and new coins are being launched daily.
The ecosystem around cryptocurrencies is developing quickly but until regulators across the globe can get a handle on the framework required to support this new financial system, cryptocurrencies will remain a magnet for criminals and scammers. Widespread price manipulation of the popular coins has been reported and while these activities are illegal in mainstream financial markets, the cryptosphere can still get away with it.
Cryptocurrencies came about due to advances in technology, chiefly the blockchain. This distributed ledger systems serves as a decentralised, secure network and enables cryptocurrencies. It also allows businesses and organisations to circumvent traditional routes to raising capital and more and more companies are launching their own coins or tokens on the blockchain. More than $6 billion was raised through coin launches or initial coin offerings (ICO) in 2017.
In their 2017, Global Cryptocurrency Benchmarking Study, The Cambridge Centre For Alternative Finance, reported that the number of unique active users of cryptocurrency wallets is estimated to be between 2.9 million and 5.8 million. Since, the explosion of the crypto market at the end of last year, many industry experts believe that this number tripled.
Sources and references:
https://bitcoinexchangeguide.com/ftv-coin-ico/
