Altcoins have been in a bearish trend for almost two years now. When Bitcoin showed signs of recovery, many people thought that the altcoin market will follow suit. At least this had been the trend in the past. However, things have been a bit different this time around, creating doubts in the minds of many altcoin hodlers.
Most recently, the focus has been on Bitcoin and its price movement. This does not come as a surprise, considering its status and the upcoming reward halving event. Also, many people believe that it is only Bitcoin that can resurrect the entire crypto market. Apart from Bitcoin, only a few other cryptos have displayed significant liveliness in the crypto marketplace.
This development has raised a lot of questions around the sustainability of the altcoins market. Most of the people that doubt the survival of cryptos are those who pay attention to the altcoins market.
The Altcoin Market is Going Through Filtration
Today, there are thousands of altcoins, most of which were born during the 2017 ICO boom era. Crypto followers and enthusiasts invested a lot of money into these projects. The taste in the mouth of these investors is still bitter. The best of them are simply hopeful that in the long run, the market will pick up.
In a discussion with Coinstituency, Daniel Essien, CEO of InfractA, a blockchain-based implementation in infrastructural development acknowledged the fact that almost everyone’s attention is currently on Bitcoin and a few altcoins. According to Essien, the reason for this kind of market behavior is that players have learned from past experience, especially at the ICO market peak in 2017.
Essien explained that the crash that followed in December 2017 and the recovery path that the market took from 2018 onwards signaled the relative resilience of the various cryptocurrencies to players. “We saw how many projects were outright Ponzi schemes, and other elaborate scams, says Essien. “Even more ran out of steam and collapsed as crypto prices plunged.
What Sustains a Particular Cryptocurrency?
Essien notes that most of today’s crypto holders are veterans from that 2017 crash. This is the group that have focused most of their speculative activities on cryptos that have shown the ability to survive the toughest of market volatilities.
Furthermore, he explains that as much of a cryptocurrency’s visibility depends on the size of its community, it is natural for things to become quiet for projects whose community has shrunk. This is because many of their supporters jump ship to more promising and resilient coins.
And of course there’s also the point to be made that many altcoin projects initially spent so much on media to sustain the hype and increase adoption. Now, the focus has shifted to product development and there’s less media activity to bolster community growth, hence the quiet.
How Will Altcoins Recover?
Despite the current bearishness of the altcoins market, Essien foresees a revival in the future. His forecast for this revival is a few years from now, and some of the popular altcoins would have become dead stars by then.
The current dominant players who are mostly a mix of crypto activists, speculators and anarchists have laid the foundation for cryptocurrency adoption. But I don’t expect them to lead the rejuvenation. That honour will go to new entrants, especially more institutional players coming in to take advantage of clearer government regulation around cryptocurrencies.
Essien also predicts the imminent arrival of new tokens that will match the aspiration of traditional investors. According to him, these new tokens will bring in more money into the crypto ecosystem. Some of that money will find their way to existing altcoins which have shown good resilience.
His prediction in terms of a timeline for this revival is within 5 years from the time of writing. This prediction is based on the extent of activities that are happening in the space regarding government regulation that gives hope and optimism. He also emphasizes that his expectation is for the rejuvenation to come from institutional players with Billions of dollars in financial firepower. Institutional players can’t do much in the space without the backing of government regulations.
Cryptocurrency is Going Mainstream
As things stand, a lot of regulatory changes are taking shape across the world that will help make cryptocurrency mainstream and attractive to traditional investors. For example, China is working on legalizing cryptocurrency mining within its borders by next year. Iran has already begun issuing mining licenses. Only this week, Germany moved to allow banks hold Bitcoin.
Also, projects with practical use cases that connect with traditional investors will become more abundant in the coming years. All these changes happening across various territories will create the right environment within the next five years for a crypto market rejuvenation which will rub off on altcoins.
Essien concludes by expressing his expectations of what the future cryptocurrency ecosystem will look like. This is in line with the emergence of more realistic solutions that are focused on enhancing existing processes.
I expect that the future will be ruled by projects that solve real world problems efficiently. For example, the company I co-founded, INFRACTA, is using Blockchain and IoT to solve the infrastructure deficit problem in Africa. We are building a blockchain solution to enable infrastructure projects to be built and governed more efficiently. Our ambition is to help fill the nearly $100BN infrastructure gap in Sub-Saharan Africa alone.
Iyke Aru is a seasoned author and educator in the blockchain and cryptocurrency industry. He has been in the business of crypto content writing for many years with thousands of his articles across several platforms on the internet. Iyke is based in Nigeria where he stands out as one of the most informed and credible figures in the cryptocurrency industry. Outside blockchain and crypto, you will most likely catch Iyke playing or discussing football with friends and family.