Conversely to the above, in periods where there are very low levels of innovation, dominance thrives. This is because investors, rather than take poorly-performing risks on new technologies that don’t offer much in the way of real innovation, tend to settle back into buying up . This was of curse the case many years ago when there was pretty much only and a handful of other Blockchains around. But interestingly, it was also the case in the latter part of 2017, up until somewhere through 2018, too:
What’s notable about this time is that this was when the ICO fever was in full force, with what people claimed were $100 million, then $1 billion, then famously in Telegram’s case, $2 billion raises, followed by nothing whatsoever in the way of any product engineering or delivery. It appears then that while some were swept up by the promises of ICO riches, many of the wisest investors simply went into .
In this way functions in the digital capital markets much like gold or Treasury bonds do in the physical and traditional capital markets. When there is nothing exciting to buy, becomes the default asset choice for the big bucks in , basically.
With this in mind, it’s interesting to note that while digital currency markets are climbing, they are doing so more conservatively than in the past, with still >50% of all market buying taking place around the world’s first ever asset. Part of this however, is also due to the apparent fragmentation of the market, and this is where a closer look at the charts makes for particularly interesting reading:
Notice how in particular, since January 2018 other coins have become the focus of much more market share than they formerly occupied (white line). Also note how this trend has accelerated a lot over past month, too.
What’s also particularly notable is how since around September last year, XRP has consistently occupied an increasingly dominant share of the market, while , the former market catalyst, has buried its head under the oceans of many of the coins and it has either inspired or itself been the creator force of. This process, whereby a triggers another innovation which starts outpacing its share of the market in dollar terms, is usually a fairly bullish indicator. Last time, it was , which itself was derived from the , that was the change agent. Now, it appears to be other Blockchains such as and that are set to do the same perhaps.
Notably, as I alluded to above, during the time this process is going on, it is fairly typical that investors get excited about XRP. That happened before at the point of the 2016 event, remember (see first chart). The reason is that XRP is easily the most speculative digital asset in the world. Much of its sales pitch revolves around hard-to-quantify and murky announcements about its success in the commercial banking market, which almost no one has any clue about whatsoever. Therefore, in more innovative times, investors tend to veer towards the notion that much of this supposed innovation is actually happening and taking place; in times when there is not much that appeals however, they dismiss this idea more.
The takeaway from all this is that the gradual surge in non-, non- assets that seems to be a consistent market event now is probably another indicator of some substantial gains supported by what do appear to be product development announcements.
That’s a great thing indeed for investors.
Published at Fri, 03 May 2019 19:09:56 +0000
