When Bitcoin was launched in 2009 by Satoshi Nakamoto, no one expected that this blockchain technology would revolutionize purchases, transactions, businesses and operations on personal data within a few years. Now, over a period of eight years, there are 873 cryptocurrencies having a total market cap of $151,323,010,347.
Since the start of the year, we have seen a whopping 850% increase in the value of the crypto market and analysts say that there are several reasons behind this growth including a steady supply of Initial Coin Offerings (ICOs), increased trade in cryptocurrencies, and a sustained number of investors contributing to the expansion of this trend.
Continuing ICO Activity
The research firm Autonomous revealed in its research that companies were able to raise $1.3 billion through the ICOs during the first half of this year. These stats were also reported by CNBC. Surprisingly, FinTech firms have raised a lot more through ICOs than they could through venture capital investment.
According to forexvestor.com:
With the appearance of ICOs, Bitcoin’s market share dropped from over 90% in 2016 to less than 50% today.
These token sales are also undermining the popularity of other traditional means of raising money as the convenience brought by them appears to be attractive to investors and entrepreneurs.
More Funds Entering The Market
The growing number of hedge funds in the market is another key factor which has hiked the popularity of cryptocurrencies. According to reports by Business Insider, there are over 50 hedge funds in the market which are inclined to focus on these currencies. With more funds completing the legal paperwork and purchasing crypto assets, the market will soon be seeing new highs.
The speed at which companies raise money through ICOs is remarkable and one such example is that of Gnosis which raised $12 million is about 10 minutes in April. Putting it to shame were the $35 million raised in less than 30 seconds by Brave which was a web browser startup initiated by the founder of Mozilla. Acceptance in the Market
Mainstream players like Nasdaq, Capital One Financial (NYSE:COF), New York Stock Exchange, Visa (NYSE:V) and Goldman Sachs (NYSE:GS) have also invested in this underlying technology establishing its importance and potential for growth. Every day, as much as $6.6 billion changes hands in digital tokens.
The most recent fluctuation in the values of different cryptocurrencies was brought about by the Chinese central bank as it issued a notice of prohibiting ICOs. In 2013, China did the same with Bitcoin to promote its own local currency, yuan. However, the price of Bitcoin still managed to see greater heights as more people saw potential in it.
A Bitcoin analyst Kay Van-Peterson predicts,
Bitcoin price can reach $100,000 in ten years from now. He expects that cryptocurrencies (not only Bitcoin) will account for 10% of the daily turnover in the Forex market (which is dominated by fiat currencies).
Today, the trading volume of all the cryptocurrencies on a daily basis is $7 billion and if they get to a 10% share then it will rise to a whopping $500 billion which is nothing less than an impressive figure.