While it is no secret that the crypto market has experienced some changes in the last weeks, the growing nature of the blockchain technology and the increasing number of Initial Coin Offerings (ICO) and related projects tell a story of hope. The applications of cryptocurrencies and blockchain-based solutions are on the rise.
However, not everybody shares the same optimism. The Juniper Research Group revealed the results of its most recent study, and the baffling conclusion stated that the cryptocurrency market is at the risk of implosion, citing a low transaction volume as one of the main culprits.
The piece of news was reported by Bloomberg this week. The study, which title is “The Future of Cryptocurrency: Bitcoin & Altcoin Trends & Challenges 2018-2023” assesses the primary challenges of digital tokens with an eye on the future, paying special attention to regulatory, social, and technical aspects and potential issues.
The paper was powered by a survey and touched interesting subjects in its analysis, such as regulatory modifications and developments in different markets as other causes of the projected collapse.
Juniper suggests that the recent uptick in hacking attacks has severely damaged the potential and current investors’ confidence in the exchanges, as some of them have failed to fend off the action of cybercriminals. Blockchain forking represents another point in the analysis that affects the recent volatility in the market and the hypothetical scenario proposed by the researching group.
Judging By the Numbers
According to Juniper, even the Bitcoin blockchain platform has experienced a marked drop in daily transaction volumes, going from 360,000 per day at the end of 2017 (arguably the biggest year in the crypto market and the exact moment in which Bitcoin was trading at an all-time high $20,000) to nearly 230,000 in September of 2018.
When it comes to daily transaction values, the numbers are, again, disconcerting. In the same period, it went from $3.7 billion to less than $670 million, and this is always according to Juniper’s data. Crypto transactions amounted to, approximately, $1.4 trillion. In the second quarter of 2018, the values collapsed 75%, with a total market capitalization down to $355 billion.
Juniper said that judging by the activity and trends shown in the first half of the third quarter, it estimated “a further 47 percent quarter-on-quarter drop in transaction values” in that timeframe. Citing concerns about the “innate valuation of Bitcoin, and of the operating practices of many exchanges,” the firm concludes that the market is about to implode. Not too long ago, Diar published a similar sentiment.
A Little Bit about Juniper Research
The Juniper Research foundation was created in 2001 by the Industry Consultant Tony Crabtree. It is now one of the leading analyst firms in the mobile and digital tech sector, specializing in identifying and appraising new high growth market sectors within the digital ecosystem.
The firm offers market sizing and forecasting with competitive analysis, strategic assessment, and business modeling. Among its services are research, forecasting & consultancy for Digital Technology Markets, and Harvest, which is an interactive online platform that lets users view and download the latest data trends and forecasts.
By Andrés Chávez
