Crypto Prices May Be Down, But Industry Fundamentals Are Healthier Than Ever

The cryptocurrency market has been through the wringer over the past 15 months. The prices of most altcoins have plummeted by 90% or more from their all-time highs, and the king of crypto itself, Bitcoin, has declined as much as 85% as well.
But despite prices being far lower than they once were, the health of the industry itself is only getting stronger fundamentally, according to one cryptocurrency analysis firm.
Boston-Based Data Firm Reveals Crypto Industry Is Healthier Than Ever
While sentiment around the cryptocurrency market is still extremely bearish – and rightfully so considering the severity of the current bear market –the market is showing signs of maturing, and undeterred developers and users of top cryptocurrencies have continued to chug along.
The result is an industry that is a lot healthier than prices may reflect, according to Boston-based crypto analytics firm Flipside Crypto. The cryptocurrency number-crunching company has released what it calls the FCAS25 – an index that tracks the overall health of the crypto industry over time, using key metrics such as user activity, developer behavior, and market maturity.
Related Reading | Crypto Bull Returns, Predicts Targets For Bitcoin, Ethereum, Ripple, Litecoin
According to Flipside Crypto’s FCAS25, which is based on a “time-weight moving average” of 25 individual cryptocurrencies, the market health is far stronger now than it was one year ago, and is ten points shy of its previous all-time high.
The Coinbase Ventures-backed Flipside Crypto says that market maturity, one of the three key factors it uses to determine industry health, has actually fallen since the 2017 peak of the bull run. Since market maturity is tied to “conventional understanding and public perception of the crypto-asset space,” it is reasonable that it has declined ever since the media storm of 2017 that sent Bitcoin into the stratosphere and made it a household name.
Developer behavior has stayed relatively consistent, “gradually increasing among the Flipside 25 over the course of the last 2 years.” Flipside says that this demonstrates a “healthy commitment among the teams supporting the ongoing improvements to the top crypto projects.”

*Today's Daily Mover*: KIN (@kin_foundation). New integrations, mainnet launch, and developer programs have KIN fundamentals on the rise: https://t.co/t82zgmeY3F #crypto #data #fundamentals pic.twitter.com/rHP8bqMizL
— Flipside Crypto (@flipsidecryptod) March 28, 2019

User activity, has only grown significantly among “top projects,” the firm says. “This leads us to believe that while investor interest has perhaps waned since early 2018, the top projects have successfully increased on-chain traffic and utilization of their projects; a sign of underlying fundamental health.”
Flipside Crypto: The Cryptocurrency Industry is “Humming”
Flipside crypto calls their FCAS25 “a single, consistently comparable value for measuring cryptocurrency project health.” The formula uses a list of cryptocurrency projects that ebbs and flows based on their fundamental health. Together, they’re weighted to determine the overall health of the entire industry. The crypto industry, says Dave Balter, CEO of Flipside Crypto, is “humming.”
Related Reading | Fundamental Analyst: 90% of Smaller Crypto Projects Will Result in Complete Loss
“When cryptocurrency prices are down, everyone worries about industry health,” he explained. “But price is a poor indicator for whether cryptocurrency projects and platforms are gaining customers or delivering product to the market.  We developed the FCAS25 to provide clarity into the fundamental health of cryptocurrency organizations, that isn’t reflected in price.  The data proves the cryptocurrency industry is far from over.  As a matter of fact, it’s humming.” 
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Fundamentals Grow While Bitcoin Price Stagnates, Where Does BTC Go From Here?

There’s no denying that Bitcoin is at a critical junction in its young ten-year lifecycle as a financial instrument and emerging technology. After becoming a household name in 2017 during the media storm and bull run to an all-time high Bitcoin price of $20,000 per BTC, the leading cryptocurrency erased much of the gains it saw during that time, and has recently stagnated as the market decides where it goes next.
But as Bitcoin price consolidates and struggles to revive the bullish momentum it once had, fundamentals are growing stronger than ever as the crypto community continues to work and build infrastructure and improve upon second-layer technologies that’ll help Bitcoin achieve its ultimate use case as a store of value, a global currency, or one of the many other problems the crypto may solve. With so much potential, speculators are left wonder where BTC will go next.
Stronger Than Ever: Bitcoin Fundamentals Today Versus One Year Ago
As Bitcoin gets sandwiched between two important moving averages and nearly all longer term indicators suggest that the bottom of the current bear market is either in or at least near, crypto Twitter has been filled with analysis from cryptocurrency traders – bulls and bears alike.
While sentiment is at an extreme low – the complete opposite of the irrational exuberance found back in December 2017 when Bitcoin went parabolic – fundamentals have never been stronger for the first-ever cryptocurrency.

Just look at the Bitcoin stats 12 Months on.
pic.twitter.com/K1QvhGWXlc
— fil₿fil₿ (@filbfilb) March 1, 2019

In a recent tweet by crypto analyst Filbfilb, the professional trader shared an excel spreadsheet screenshot that compared the current state of Bitcoin fundamentals on February 28, 2019, compared to February 28 of last year. The progress being made in BTC-related fundamentals is undeniable.
Related Reading | Strong Fundamentals: Bitcoin Daily Transactions Return to Bull Run Levels
The daily hash rate has increased by 84% year-over-year, while daily transactions are up 94% on the year. At the peak of the last bull run, BTC transaction fees skyrocketed as the network got congested under the load of new investors. Fees have dropped 90% year-over-year. Even trading volumes have grown 19% since one year ago.
Clearly, fundamentals suggest the Bitcoin is the strongest its ever been from that perspective. The fundamental growth and strength, however, is definitely not reflected in the current price.
Building a Base: Where Does Bitcoin Go From Here?
Given fundamentals growing at such a rapid pace while Bitcoin price diverges, eventually price will again follow the path of fundamentals and will return to growth. A recent poll showed that the majority of cryptocurrency traders believe that Bitcoin price will eventually reach $100,000 to “millions,” but what might price action look like during the next bull run?
Related Reading | Poll Reveals Majority of Crypto Investors See Bitcoin Price at $100,000 to Millions Long-Term 
One analyst believes that during the next market cycle, the cryptocurrency will make $10,000 per day movements.

In the 2014 bull market, we saw price swings of +/- $100 per day for the first time ever. In 2017, we saw price swings of +/- $1,000 per day. In the next bull market, we'll see price swings of +/- $10,000 per day. #bitcoin
— A v B (@ArminVanBitcoin) March 1, 2019

Prominent crypto analyst ArminVanBitcoin shared his thoughts on this trend, pointing to past price swings in previous bull markets. The analyst believes that price action will also naturally process in such a way that mimics past bull markets. In his example, he points to the 2014 bull market, where Bitcoin would have $100 daily price fluctuations, as well as the 2017 bull market, where we’ve seen $1,000 price fluctuations per day.
In the next bull market, he believes that Bitcoin will experience $10,000 per day price swings. At Bitcoin’s current price of $3,800 per BTC, that seems unimaginable. But at the prices that most crypto investors believe each BTC will reach, a $10,000 price swing would be a mere 10- to even 1% movement.
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VC Investor: Fundamentals Show Bitcoin and Ethereum Oversold in Bear Market

It’s no secret that 2018 has been a rough year for cryptocurrencies, with Bitcoin falling over 80% from its 2017 highs, and most major altcoins dropping 90% or more. Despite the market’s poor performance, one venture capitalist laid out his case for why Bitcoin and Ethereum are currently oversold from a fundamental standpoint.
The past few weeks have been especially volatile, with both Bitcoin and Ethereum setting fresh 2018 lows. Last Friday, Bitcoin fell to $3,300 and Ethereum fell to $83, the lowest prices these cryptocurrencies have seen in all of 2018. The market’s recent performance has been particularly disappointing to crypto investors, as many of them anticipated a Winter rally resembling that which occurred in late-2017, but instead they got fresh lows and dwindling signs of fundamental strength.
Bitcoin and Ethereum Fundamentally Oversold
Although the recent drops have led the overall market sentiment to hit rock bottom, Chris Burniske, a partner at the New York-based venture capital firm, Placeholder, offered a more optimistic view of the current markets in a recent Medium post, titled “Bitcoin & Ethereum: Prices are Down More than the Fundamentals.”
Initially, Burniske defined his terms and explained to readers that for him, the fundamentals of cryptocurrencies are defined by the health of their supply-siders and demand-siders.
In his words, supply-siders are “the folks who provision the network’s service (currently, the most common form of supply-sider is a miner),” and demand-siders are “the ones who consume the service.”
Furthermore, Burniske claims that network value – which is found by multiplying the price per unit by the number of outstanding units – is the term he will use to show the aggregate value the market is placing on a specific crypto-network.
While comparing the network activity to the price of both Bitcoin and Ethereum, an interesting trend can be found: network values are down significantly more than the daily number of transactions.
“Bitcoin is currently processing ~250,000 transactions per day, and Ethereum ~500,000… there is a clear divergence, where network value has continued to slide over the last few months, but the number of daily transactions is stable to ticking up… From peak, Bitcoin’s and Ethereum’s network values are down 81% and 93%, respectively, whereas daily number of transactions are only down 41% and 52%, respectively,” Burniske noted.
These statistics clearly show that from a fundamental standpoint, as defined by Burniske, both Bitcoin and Ethereum are oversold.
He adds to this argument by referencing the “native demand metric” of each network, which is the secure movement of value for Bitcoin, and processing smart contract computations for Ethereum.
When breaking down the decline in the native value metric for these two cryptocurrencies, and comparing that to their price declines, it becomes even more clear that they are fundamentally oversold.
“The two charts above are my favorite, as they show what I consider the most native demand-metric of each network. For Bitcoin, that’s securely moving value, and for Ethereum, it’s processing smart contract computations… Since their respective peak prices, Bitcoin’s and Ethereum’s network values are down 81% and 93%, respectively, whereas demand for their respective native functionalities is down 74% and 7%, respectively,” he explained.
When mulling over these numbers, it becomes crystal clear that although Bitcoin and Ethereum are both trading down significantly from their all-time-highs, their utilization has not decreased enough to justify such a large drop, which signals that they are fundamentally oversold.
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Future is Brighter Than Ever for Crypto, Says Roger Ver

The outspoken CEO of Bitcoin.com believes that the future of cryptocurrencies like Bitcoin and Bitcoin Cash is bright, despite the current market sentiment, fearing that the budding financial technology has already met its demise.
Roger Ver: Based on Fundamentals, Crypto’s Long-Term Future is Bright
Roger Ver is a polarizing character in the cryptocurrency industry.
Love him or hate him, though, there’s no denying the early Bitcoin investor has helped bring cryptocurrency into the mainstream and has pushed the envelope for widespread adoption. In his latest comments, the Bitcoin.com CEO gives a positive outlook on cryptocurrencies.
While speaking to Bloomberg, Ver was questioned about the longevity of cryptocurrencies. As a self-proclaimed “fundamentals investor,” Ver believes that “long-term the future is brighter than ever,” for cryptocurrencies, adding that there’s “more awareness,” “more adoption,” and “more stuff happening all over the world.”
Related Reading: Roger Ver Hints at Launching Bitcoin Cash-Centric Exchange
Pundits like to demonize cryptocurrency for its usage in cyber crimes, for being a Ponzi scheme, or how cryptocurrency exchanges have suffered security breaches resulting in millions of dollars stolen from investors. Ver, on the other hand, claims that these things are nothing more than “bullish signals that cryptocurrency is here to stay and here for the long-term.”
“If anything I think it’s brought additional awareness to the ecosystem in the fact that such big players are involved. The fact that hackers are trying to hack it shows its worth something. If it wasn’t worth anything, it wasn’t useful, hackers wouldn’t be wasting their time trying to hack it,” Ver said justifying his comments.

“I’m incredibly bullish on the entire crypto coin ecosystem, and Bitcoin Cash specifically,” Ver explained.

Ver Wishes Bitcoin SV and Other Crypto “Good Luck”
When asked how cryptocurrencies can shed some of the stigma surrounding them, Ver suggests that influential figures and businesses in the space “need to build an economy based on actually using cryptocurrencies as currencies rather than just a bunch of speculators speculating.” Ver says that’s been Bitcoin’s goals from day one, as is the goal of Bitcoin Cash and recent rival Bitcoin SV.
While a “war” between two Bitcoin Cash factions has been waging for months – which many point to as the uncertainty that led to Bitcoin’s break of support at $6,000, sending it to new lows – Ver wished his opposing camp “good luck.”
Related Reading: Bitcoin Cash Rivals Duke It Out Ahead of Hard Fork
“I wish every cryptocurrency good luck if they’re trying to bring more economic freedom to the world by making them useful as currencies for the world,” Ver added.
Last month, Bitcoin Cash was hard forked to split and create two “camps” as Ver called them: Bitcoin ABC and Bitcoin SV. Bitcoin ABC was favored by Ver and his supporters, while Bitcoin SV – Satoshi’s Vision – was led by Craig Wright, who claims to be Satoshi Nakamoto.
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