LBX Weekly Market Overview 28th August: A ride on the crypto carousel with LBX, The London Block Exchange
The markets have been taking us on a rollercoaster.
We witnessed a market cap of over £650BN in January 2018, but since reaching that peak it has dropped over 75%. Today, the space is valued at £156BN – a cap reminiscent of last November.
Despite the widespread price drops of cryptoassets, however, crypto-based businesses have matured and are reporting increased rates of user registrations as well as record-breaking profits. Bitmain – a crypto mining company – has reported a £785MN turnover in Q1 2018.
The space is comparable to the gold rush, where speculators made and lost fortunes, and the people selling equipment made the most attractive and sustainable profits. Similarly, exchange platforms are facilitating cryptocurrency's mass adoption by providing access for all types of investor.
It should therefore come as no surprise that the best performing cryptosssets over the past year have been tokens that are linked to said exchanges. Tokens such as Binance’s Binance Coin (BNB) – which has seen its value multiply over 100x since its ICO – and KuCoin’s KuCoin Shares (KCS) have enabled investors to benefit from the rapid growth and profitability of these platforms.
Due to their resilience in the bear market, there has been a marked focus shift to the long-term value of exchange tokens; it is clear that as competition and interest in the space rises, so will the inherent utility – and, by extension, the value – of these assets.
Institutional investors back projects that provide the required infrastructure and, contrary to public opinion, aren't just looking for a quick profit. Smart money is interested in long-term profitability and survival and, as the space matures – with educational content being developed and exchanges becoming more efficient – survival is looking certain.
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