Blockchain and crypto markets - reporting from the trenches

Reporting is no mine, though. I’ll reproduce some insights from Pavel Kravchenko, a smart PhD founder of Distributed Labs whom I was introduced to by Dave Birch.

Pavel has just returned from a trip to California where he attended a number of blockchain and crypto events. Here’s his view of where the market is going to:

• Large funds are still doing private token placements.
• Protocols with new consensus models is the hottest thing with $200M+ valuations at the whitepaper stage - the hope is listing on exchanges.
• Public ICOs are dead.
• The market is still in the stage of overheating, will last until the moment when the startups' valuations by funds become adequate to revenues.
• Sooner or later collapse of Tether is expected with devastating influence for the total market cap.

My comments:

As for the last point, Tether is interesting from several perspectives. The company (read 1-2 people) is making serious profit as Tether is used for 75% of all BTC trades. If Tether collapses, BTC trading would indeed be affected. Exchange-traded derivatives such as CME/CBOE-listed BTC futures - as alternatives to spot BTC market - are not easily accessible by the speculators.

Fear not: the Winklevoss twins already got an approval for a regulated “Gemini dollar” which will compete with Tether. Paxos joined the ranks too. These guys are, though, after Tether’s profits – they cannot make BTC stable as its volatility is driven by the speculative market.

Several companies are working on enterprise-grade “stablecoins” which are completely different in nature: it’s about tokenisation of fiat money, rather than issuing new cryptocurrencies. The questions of liquidity and trust are approached differently too.