In Christopher Nolan’s brilliant film The Dark Knight Lt Jim Gordon says (of Batman) “He’s the hero Gotham deserves, but not the one it needs right now. So we’ll hunt him. Because he can take it. Because he’s not our hero. He’s a silent guardian. A watchful protector.” I cannot help but feel this aptly summarises the downturn the market is currently experiencing.

Crash

The explosion in prices and the incredible level of ICO investment last Dec/Jan wasn’t all positive. It created a slew of over-valued and under developed projects that are now labouring under that same validation. Wise business counsel suggests you should raise the money you need, not as much money as you can. I think it is likely a lot of that ICO investment was wasted.

ICOs & Overvalued Projects

The lack of vetting of ICO projects throughout that period led to downright scams, honest failures and storytellers selling ideas for millions and in some cases, billions. There seemed to be a ‘coin’ for just about anything; BananaCoin, HempCoin, TrumpCoin etc. When meme projects can raise millions it indicates there’s a flaw somewhere in the capital raising process. The crypto community needs to funnel investment into viable, reliable and realistic projects.

We are now in the grips of a determined bear market. The recent Bitcoin rally to the mid $8K range proving a false flag. The current consensus is we are headed for the $5K range. Altcoins have suffered more dramatically. IOTA as a project has always worried me. I feel it is underdeveloped and recent network outage instances are a cause for concern. It has dipped to $0.53, it’s lowest level since November 2017.

This is not a wholly negative development. Certainly in the short term, people (myself included) will lose money as projects fail. This downturn looks like it could be the end for some projects. That is good, in order for the industry to evolve this must happen. ICO investors are much more sceptical now and that is going to be reflected in the projects that actually raise enough to hit soft caps in ICOs. This process seperates the wheat from the chaff. I look forward to seeing which projects survive and what new players explode on the scene.

Downturn – Opportunity to buy the dip?

Other projects to suffer a big downturn in valuation include TRON, Ethereum, Stellar Lumens and DASH. I believe these projects are worth focusing on. They all share attributes that I feel will allow them to ride out this crash and emerge all the better in 2019.

Development Status

All the above have functioning platforms and are live projects as opposed to early stage development. Ethereum has an existing network of dApps. TRON’s daily transaction rate will surpass Ethereum’s shortly. DASH is adding merchants almost daily and is enjoying particular penetration in Venezuela.

Partnerships

Stellar Lumens has a number of high profile projects in active development with big corporate players. Being hitched as it were to institutions like this offers security of a sort. TRON, likewise, with BitTorrent and a litany of other partnerships has a network external to the crypto-verse. As noted above DASH has an ever expanding merchant base.

Active Communities

A real sign of failing project is a limp community. I think a lot of people are sadly discovering this in Telegram groups and Discord channels almost daily now. Each of the highlighted projects has a lot of external stakeholders. This provides an ongoing level of support that speaks to the viability of the project.

High Trading Volume

Trading volume is a crude but solid indicator of the level of interest in any given equity, commodity or cryptocurrency. Token value crudely communicates sentiment toward the project. Each of the projects highlighted here still enjoys high daily volume which indicates there are still plenty of people willing to buy in, indicating confidence in the long term outlook.