The state of the current market suggests a variety of platforms and projects are doing what they can to recover from the ~$600B USD loss the market has suffered over the last 12 months. We see market leaders such as Bitcoin, Ethereum, and the rest of the top 10 cryptocurrencies taking the biggest losses in over the last year while some smaller coins, of whose value are not directly tied to that of Bitcoin, have managed to remain profitable and even gain value.

While the top cryptocurrencies largely drive the market and it’s overall value, smaller coins also have added to the market’s current state. Over the last year the market has seen 44% of exchange traded coins completely abandoned, 18% of which have been abandoned permanently, allowing whatever value they had managed to accumulate to wither to nothing due to low trading volumes.

With the introduction of Bitcoin futures in December of 2017, we saw the entrance of a large number of bears and pessimists which contributed the decline in overall value to Bitcoin itself, which then changed the landscape of the entire market.

Going forward the driving factors that define overall value seem to be that of speculative demand and transactional demand, as these two factors reflect publicly towards the increase or decrease in day to day trading values. While these two factors are important the lack of consumer demand still presents the biggest challenge for cryptocurrency as individuals who have cryptocurrency have yet to live in a system where they are able to use it on a daily basis like that of fiat currency. Unless there is a mass adoption of retailers utilizing cryptocurrency as a valid payment system, the current state of the market will continue. While we do see benefits in cryptocurrency over that of traditional payment processing systems, the technology still needs to adapt and evolve to the point where transfer times and transaction fees become the blatantly obvious choice for retailers and consumers alike.

The market has already shown movement towards merging on some level with traditional financial structuring to stay relevant against fiat currency, but things are changing constantly and a profitable compromise is always being developed. While we have already seen glimpses of such developments, the market has yet to see the one that makes a game changing impact.