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The crypto-currency craze of last year dropped the prices for the crypto-on the zentausend times their original values. And Bitcoin was not the only Token, which reached an all-time high. Even the prices of Altcoins like Ethereum, Cardano, Ripple, Stellar and NEO were driven by increased demand from investors who wanted to have a bit of action, to new heights. The market for crypto-currencies has reached the beginning of January of this year to a peak of almost 650 billion euros.
a Lot of people, especially the traditional investors, called the meteoric rise of the market a “bubble”. Since everyone is trying to understand the new events by the past, it was considered that the crypto-space is often the lens of the “Dotcom crash” in the late 1990s. Hundreds of companies have found according to the so-called “Dotcom bubble” came to an abrupt end.
So, is crypto on a similar path?
still on the border
The crypto space can still be considered as on the border. Blockchain, as a technology, sees only gradually, a width, a step-by-step introduction. There are still a few rules to keep the company and a participant in chess. The market is thick with speculation. Most of the projects that are behind crypto-Tokens, still need to show the actual value of the real world or provide.
It seems to be difficult to determine the basis for the Performance of crypto-currencies. Support can easily switch from one project to another, even if there are many basic conditions for the sudden increase in the price of a token.
It is also difficult to foresee how certain events will affect the market. For example, many had expected that Chinese Blockchain projects would have a hard time when the prohibition of the Initial Coin Offerings (ICOs). This prohibition, however, seems to be for companies like NEO quite beneficial. Since the launch of the platform was preceded by the prohibition, has been avoided, Essentially, that she was exploited by the fraudulent projects. The support for NEO to grow, social Hype and price movement showed, even resistance, as a Bitcoin fell.
Intelligible
economic bubbles arise when assets are traded at prices that are substantially above their actual values. The highly speculative nature of the crypto market has definitely contributed to the Overvaluation of a number of crypto-currencies. Joke-currency Dogecoin, for example, at the time of writing, a market share of about 262 million Euro. In the tip, it even reached more than 800 million euros – this is an amazing achievement for a project should not be more than a parody.
According to traditional definitions, so there are bearings, which refer to what is happening with crypto-currencies as a bubble. Therefore, it is only natural and quite fair to compare it with the Dotcom bubble, as it is the latest, in the case of disruptive technologies. Both of them have shown Similarities in the development of events.
the arrival of disruptive technologies. The advent of accessible Personal Computing, commercial Internet Service providers, and better Web Browser technology created company is a consumer market for Internet. The use of the Internet in the 90s also experienced a rapid growth. In crypto, there’s the Blockchain-technology. The use of distributed Ledger technology has been proposed since more than a decade. It is not a long time, as Bitcoin has experienced a Hype, platforms like Ethereum have been introduced and found more applications. Traditional institutions legitimized the technology, by taking self-Blockchain-projects.
Explosion of activities. Both events showed the sudden Explosion of projects and companies that wanted to use the technology. Hundreds of companies were founded during the dot-com madness. In 1999 there were 457 IPOs (Initial Public Offerings – IPOs), most of which were technology companies. In March 2000, during the height of the boom, were traded 4.715 company on the Nasdaq. The crypto industry is going through a similar experience with ICOs. In the year 2017 CoinSchedule recorded 210 ICOs, in 2016, there were only 43. This ICOs collected more than 5 billion Euro of financial resources. This year, there were already more than 70 Token sales.
a sharp increase of shares / Token prices. The share prices of Internet companies increased, while the dot-com industry has developed. Of the IPOs in 1999, 117 companies have doubled their share prices, already on the first day of trading, and underlined the Exuberance of the market. The Nasdaq peaked in March 2000 to a peak of 5.132. Crypto-Token to show even more profits. On the crypto market, it is not unusual that the Token can reach within a few months hundreds of Paint your ICO prices.
These are the patterns that many believe that the trajectory of crypto is the same. The dot-com bubble burst sometime in the year 2002. The Nasdaq peaked in September 2002, the bottom of the valley. It is expected that bad projects will be exposed. The market corrects itself, finally, solid. It is expected that Coins lose their value. Projects and companies will go bankrupt. Investors will lose their bets. This is how it looks.
Recent events seem to be similar. The February was hit by a massive correction in the price of Bitcoin fell to 4,800 euros brand. Other Coins also had to absorb large losses. The overall market capitalisation fell by more than 60 percent from a peak of around 214 billion euros. Many thought the bubble had burst. Analysts warned even before that, that Bitcoin would fall under the 811 Euro brand. The Token prices were in March rather volatile and have not found a floor.
lessons to be learned
Noam Levenson, CEO and co-founder of the Eden Block, says:
“So, the real question is, are we in a bubble? But how big the bubble will be? If we respect the natural development of the disruptive technology, then we need to understand that, in every soliden speculative run-up an equally massive crash. From the Tulip bubble in the 17th century. Century to the Internet 15 years ago, the crashes are bubble is inevitable. So the question is: What can we learn from past bubbles and how much they can influence our actions on the crypto market?”
included in The case of pets.com the poster boy for what went on during the dot-com Era are wrong, should be Involved for crypto-plenty of lessons. The arrival of the Internet has encouraged the company to engage in direct E-Commerce efforts. Pets.com tried to sell pet accessories, similar to Amazon books via Online channel sold. The company was also able to procure risk capital, which gave a boost to his ratings.
It was based on a poor business model and had no independent market study to its sustainability, let alone profitability. The company could not make ends meet. The attempt to absorb the high shipping costs for pet food and cat litter, was clearly more than an Oversight.
The crypto-space looks similar, poorly planned “Me-Too Ventures”. It looks as if companies were trying to symbolize with Blockchain, everything, to make sure whether the technology is Mature enough to handle a specific use case, or the targeted industries of these companies have a real need for decentralised technology.
Blockchain-companies can, however, be taken in the exact comparison. Here are some important differences in their function are:
minimal-to-no logistics. Many dot-com companies were forced to both Online channels as well as physical fulfillment in Balance. Companies such as Pets.com, eToys and Webvan found from the logistics overwhelmed Blockchain-projects mainly deal with digital transactions, and a Token Assets. If the company is not aiming for the Omni-channel or a physical presence, there are only minimal logistical concerns.
Smaller workforce. Since many of the Dotcom companies had to struggle with the physical settlement, had to hire all types of workers, the mass of warehouse and logistics services, development, sales and marketing Department to maintain. Most of the Blockchain Teams are lean and mean. Most of them can even be easily operated remotely, which reduces the need to build physical offices and infrastructure.
comfort through technology. The market is technically crypto is also the demographics companies on your side. Dotcom companies had to put in the boomers and Gen-Xers with technological immigrants, whereby they were forced to, resources for, customer training, and customer service. Millennials, the predominant demographics are now. The participants in the crypto market are now able to use digital channels for large-scale transactions.
Innovation and sustainability
While it is important for anyone who is entering the crypto space, is wise, just be careful to move forward, especially if the Assets comes to trading and investing in crypto, it would be unfair, what has brought about the Blockchain technology, completely reject. The Parallels to the dot-com bubble should serve the interest groups as a lesson.
You have to remember that the consequences of the Dotcom-confirmed bladder that truly innovative organizations and technologies able to withstand the storm. Companies such as Amazon and eBay have proven that the combination of new ideas with good business can lead to success.
Certainly would have the Situation with crypto and the surroundings of Dotcoms nearly twenty years ago their differences. Companies need to be able to navigate through these nuances to be able to the best possible decision. Whether crypto-companies will have a similar fate as dotcom, remains to be seen. At least for the Moment, the crypto-owners will have the Chance to write the story in a different way.
