Published: Aug 17, 2018 12:52 p.m. ET Parallels with the collapse of the tech bubble, analysts say In an echo of the carnage following the collapse of the 1990s tech bubble, the cryptocurrency industry will see a significant number of additional projects fail, said one asset management firm. Element Digital Asset Management said that while the recent drawdown of around 78% in the total value of cryptocurrencies from its peak matches the drop by the Nasdaq-100 Index
following the bursting of the internet bubble, the cycle hasn’t ran its course, and investors in small projects should expect further disappointment.
“An analysis of historical project failures suggests that maximum pain in the altcoin market has not yet been felt. Investors should expect a total loss of investment in certain coins as projects eventually fail and get delisted,” wrote Thejas Nalval, Elements portfolio director, and Kevin Lu, the firm’s director of quantitative research.
Altcoins, are coins other than bitcoin
the worlds biggest digital currency. Element evaluated the top 100 coins by market cap at the beginning of each year from 2015 through 2018 and found that a significant number of ventures had ceased operations.
Of the top 100 ventures at the beginning of 2015, more than one-third were no longer running. Despite the failure rate, it has not stopped an abundance of cash pouring into the initial coin offering market.
After raising $6.2 billion in 2017, ICOs have raised $18 billion in 2018, to date, according to data from CoinSchedule. All this as warning signs grow. Read more from marketwatch.com…
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