Last year was a true coming-out party for the cryptocurrency market. After virtual currencies began the year with a combined market cap of less than $18 billion, their aggregate value soared almost $600 billion by year’s end to $613 billion.
That’s a gain of more than 3,300%, and it’s probably the greatest single year for an asset class that we’ll ever see. However, the current year hasn’t brought the same jubilation for cryptocurrency investors.
In fact, virtual currencies at one point shed 67% of their value, from peak to trough, in a matter of weeks. Some would suggest that this was simple profit-taking, and to some extent they may very well be correct.
But the recent downdraft in digital currencies, which has been ongoing now for more than two months, may represent a loss of trust among retail investors that these virtual currencies and blockchain projects can deliver on their promises. Blockchain is the digital, distributed, and decentralized ledger that underlies most cryptocurrencies and is responsible for logging all transaction data without the need for a bank.
Though you might shudder at the thought of regulation in the crypto market, it’s perhaps the one factor in the near term that could restore faith in virtual currencies. You see, quite a few investors bought into the early cryptocurrency craze on the notion of perceived anonymity. Read more from fool.com…
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