In today’s cryptocurrency landscape, it’s striking how many companies offer the same services. There are numerous exchanges, multiple wallet providers and, heck, there’s even a glut of crypto media outlets.
When times are good--think $20,000 Bitcoin--such plenty isn’t a problem. The pie gets bigger, customers pour in and everyone grabs a piece of the market. What about now? Prices are stuck in a gutter, public interest in crypto has waned, and trading volume is down 90% in some quarters.
Right now, it feels there are too many players on the board and--as with any industry downturn--consolidation is a logical response. In a possible sign of things to come, Korea’s NXMH last week acquired the venerable Luxembourg-based BitStamp exchange. More consolidation feels inevitable. Might rivals Coinbase and Circle, which recently partnered on a stable coin, grow closer? Will there be mergers among the horde of companies offering enterprise blockchain?
To get a sense of what might happen next, I turned to Michael Sonnenshein, who heads Grayscale Investments, which is part of crypto consortium giant DCG. Does he see the downturn leading to a wave of consolidation in the crypto industry?
“I don't necessarily think price decline is what opens the gateway to consolidation or M&A. But there will be an acceleration of consolidation among exchanges, then also among custodial and wallet solutions,” Sonnenshein said.
He described the current state of crypto as a land grab for territory, and noted it’s too late for companies to build significant market share through organic growth. Sonnenshein added, though, that crypto services are not a winner-take-all market. Instead, we’re instead likely to end up with a handful of big players dominating different sectors.
“Based on the traditional financial industry, where custody and exchange providers consolidated, there will be a couple key players and a narrative that their size will be better able to serve key segments of the market,” he said, pointing to how a handful of giants--BNY, Fidelity and Northern Trust--have come to dominate the conventional custodial services industry.
This notion of the crypto industry evolving in the same way as the old-line financial world is intriguing and just a wee bit ironic. After all, wasn’t the original crypto dream all about decentralization?
Thanks as always for reading--more musings below.
|Jeff John Roberts|
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Our latest guest on Balancing the Ledger was Robert Leshner, CEO of Compound, a site that's building an interest rate market for cryptocurrencies. Be sure to listen to his smart takes on stable coins (they're a great deal--for the issuers) and what the end of low Fed rates mean for crypto.
Where there's chaos, there's opportunity. The same aspects of crypto markets that vex investors--extreme volatility, sketchy players, puzzling valuation metrics--are proving a boon for the Big Four consultancies, who are making a mint by plying their accounting and consultancy services. An FT article titled "Auditors Grapple with Crypto and the Blockchain," drops a few eyebrow-raising numbers:
2: Number of accounting classifications for crypto (intangible assets vs inventory)
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The Cult of St Vitalik. Hard core crypto folks have long talked about their favorite cryptocurrency with a religious-like zeal. But in the case of Ethereum, a wave of real world idolatry has been gathering around founder Vitalik Buterin. From a tweet at last week's Devcon summit:
FOMO NO MO'
Don't miss out: The blockchain-for-journalism startup Civil is having a rough few weeks. Its grand plans for an ICO washed out and no one, including die-hard crypto geeks, is sure what the hell it aspires to do. Now, along comes the New York Times with a schadenfreude-soaked takedown.
The NYT piece deflates whatever hype still surrounded Civil but, in our view, let's not rush to dance on their grave. It takes courage to experiment and, in five years, we may realize Civil--which is still pushing ahead--was simply ahead of its time.
Civil took its currency to market in September for a month. In the end, it fell short of the minimum number of tokens it had hoped to sell by more than $6 million. Of the approximately $1.4 million worth of tokens the company did sell, about 80 percent was purchased by ConsenSys-- the blockchain software company that underwrote Civil in the first place. It was as if an Olympic weight lifter said that, at a minimum, he'd be able to clean and jerk 400 pounds, and then did not manage to move the bar more than an inch off the ground.
کد مطلب: 8788
تاریخ و زمان انتشار: 15 آبان 1397, 13:07
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