During 2017 and the beginning of 2018, several cryptocurrency and blockchain-related projects have been released to the market. However, not all these thousands of tokens created will be growing during the next bull market. It is very important for investors to be sure that the coins they hold are going to be developed in the future as well.
The Twitter user Big Dawg Crypto, wrote a Tweet in which he says that he does not think that Bakkt and Fidelity will help prices grow in the near future. According to him, when markets go back up, this does not mean that all projects will behave in a similar way.
Changpeng Zhao, the CEO of Binance, one of the largest crypto trading platforms in terms of trading volume has also decided to write about this. He wrote similar words as Big Dawg Crypto. He went on by saying that a lot of coins with no development will eventually die, advising users to review their holdings and making sure that the teams behind them are working.
When markets do go back up that doesn't mean all projects will.
A lot of coins with no development will die.Review your holdings. Make sure teams are WORKINGhttps://t.co/sikvGBNzY9
— CZ Binance (@cz_binance) February 10, 2019
Although he says and advises people to do their own research, he is clearly warning that there are going to be some projects that will not be growing as other digital assets.
According to research conducted by the Boston College Academics, most virtual currency startups that raised funds through an Initial Coin Offering (ICO) and crowdfunding have not survived more than 120 days. The authors of this investigation have been analyzing the Twitter accounts of several projects, including the accounts maintained by their founders.
Goldman Sachs reached a similar conclusion. Steve Strongin, the Head of Global Investment Research and Chair of the Global Markets Institute, mentioned that most of the digital currencies will not survive in their current form.
Strongin said that investors should be prepared to lose all their value if they have invested in smaller projects.
On the matter, he commented:
“Are any of today’s cryptocurrencies going to be an Amazon or a Google, or they will end up like many of the now-defunct search engines? Just because we are in a speculative bubble does not mean current prices can’t increase for a handful of survivors. At the same time, it probably does mean that most, if not all, will never see their recent peaks again.”
There are many other experts and analysts comparing the Bitcoin and crypto bubble with the dot com era in which several projects experienced an exponential price increase but falling more than 99% a few months later. Not all the projects that were present at that moment were able to grow back again.
At the moment, most of the virtual currencies lost more than 80% of their value since the beginning of this bear market. Although it seems that the bullish sentiment is starting to grow once again, Bitcoin and virtual currencies could eventually fall once again before entering a new bull market.