Multiple Cryptocurrencies Die Due To Ongoing Bitcoin Slump
Bitcoin’s value has plunged dramatically in 2018 and the volatility of the cryptocurrency is making people very nervous, with memories of the dot-com crash coming back to haunt many investors.
Bitcoin’s significant increase in value during 2017 was responsible for a cryptocurrency book that saw hundreds of cryptocurrency launch all over the world. The global market has witnessed hundreds of initial coin offerings (ICOs) in recent memory.
The ICO process is the usual process to launch a new cryptocurrency as developers offer investors a chance to get in the ground floor by purchasing the cryptocurrency during the launch stage. Unlike the traditional initial public offering that gives buyers a chance to buy shares of a company, ICOs let people buy tokens or coins that can be used to purchase the company's products or services. Many investors have bought ICO’s as they believed the cryptocurrency market was only going to get bigger and they wanted to position themselves to take advantage of the expected wave.
The numbers are staggering as ICOs raised over $3.8 billion in 2017. Those numbers have skyrocketed in 2018 as the amount has nearly tripled, with current ICO purchases already hitting $11.9 billion. Investors who pumped in massive amounts of money into these ICO’s are now in a spot of bother as many companies that launched these ICOs have gone bust as the cryptocurrency market has taken a beating.
Over 800 Cryptocurrencies Gone Bust
There are reports that nearly 800 cryptocurrencies from around the world are nearly dead or close to being dead. The website Dead Coins lists down 800 such cryptocurrencies, with all of the tokens that they represent currently trading for less than a cent. This is just a reflection of the riskiness of the ICO business and the impact that bitcoin has had on the global crypto market.
While bitcoin’s drop in value has hurt the global crypto market, the collapse of these 800 currencies has also had an impact on Bitcoin. BTH which went up to $20,000 in 2017 has fallen considerably since then and is now around $6,600 at the time of this writing. Crypto analysts expect the value of bitcoin to continue to drop in 2018 and believe that it will hit $5,000. However, they say that this is a positive sign for bitcoin as the $5,000 benchmark will be a perfect price for bitcoin.