I rarely make predictions, especially macro predictions, as I believe that it’s basically impossible to predict macro events because they are dependent on the mood of millions of people. Once something becomes big enough and well-known by the masses (like BTC, ETH, etc.) the price depends more on the mood of people than on the merits of the project itself.

Micro predictions (when you try to predict the success of a single project) are much more interesting as they mostly depend on the ability of the analyst to perform due diligence on the project and to be able to see the potential. A project which is still very obscure will have to fight purely on its own merit and its price is unlikely to depend on the mood of a large group of people.

However given the current crash of the whole market I will try to make a prediction conscious of the risk of being wrong and of how hard it is to make such a prediction.

The extreme optimism of December 2017 has switched to fear. I don’t think this is irrational, or at least this crash is not less rational than the previous parabolic rise. When people question why the price should crash I think they should also question why the price was rising so fast just before the crash.

Most likely both events where completely irrational and based on human emotions of greed and fear.

My view is that this crash is going to be the first crash for most people. The large majority of people entered crypto in 2017 and are experiencing their first crash. This is important as those people were probably living under the illusion that crypto prices always go up and that if the price goes down all you have to do is to “buy the dip”. However this strategy doesn’t work all the time, sometimes the dip is not a dip but a huge crash.

The illusion that most people had that crypto prices can only go up has been shattered. This is a form of disillusionment and now people realize that crypto is an asset class just like any other and it can go up or down just like any other and some projects will be successful and others won’t.

This is very different than the world we were living in just a few weeks ago. There was the illusion that prices could only go up, that fiat was trash and that all the projects will succeed.

This disillusionment is a necessary step for this market to reach maturity. This is very similar to the .com bubble in the late 99. Back then any company would just add “.com” to its name and its value would increase (just like now any company can add “blockchain” to its name). There was the assumption that Internet was the new El Dorado, a place where everyone could make money quickly with no effort. Of course the reality turned out to be very different, most projects failed but a few succeeded massively (think of Amazon, eBay, etc.). The point is not everyone made money (actually most people lost money) but a very small amount of people made very large amount of money by betting on the winners. Finding the winners however requires a lot of research, due diligence, analysis, discipline, etc. It is certainly not “easy money”.

I strongly believe that blockchain is going to be an important technology in the future. However it’s not realistic to expect a project that has no practical use to be worth billions of dollars.

In the current model ICO were supposed to have the following things:

– Well-known advisors (a little bit like celebrities that would endorse the project)

– Alot of partnerships (Partnership being defined in its broadest sense. Almost as if you would argue that McDonald’s has a partnership with Visa because they accept those cards. Sorry guys but that’s not a partnership. A partnership is more like when two companies work together very closely like maybe a phone carrier that works with a mobile headset manufacturer in order to offer a monthly payments plan)

– A huge community (I’m not saying community is not useful, but there is community which participates and adds value and community that is only chatting about the price going to the moon which is basically useless)

I believe the new model is going to look more like this:

– Advisors that just exist on paper and don’t contribute any value will be worth very little

– Partnerships that only exist on paper in order to generate interest will be worth very little, what will be expected from a partnership will be real actual usage of the product

– Community will be seen as a lot less important than people actually using the product

– The price of the token will be closer to its real utility than to its speculative potential

I’m sure the future will bring a few very big winners, and a large number of losers. A few projects will do very well and most projects will fail miserably. There is much more value in trying to predict which projects will succeed than in trying to predict in which direction the market will move next.