If 2017’s phenomenal crypto-market boom, supported by the entry of innumerable startups into the blockchain industry through initial coin offerings (ICOs) has taught us anything, it was that this fringe technology had some innovative gusto backing it, and it wasn’t going anywhere anytime soon.
Bitcoin at the time had most certainly cemented itself in modern discourse. For better or worse, it was making headlines all around the world as the market neared tipping point; regulators, governments, entrepreneurs and aspiring traders were catching a whiff of an unusual but golden opportunity.
Over that fateful winter, those few months from September 2017 to the end of January 2018 were significant in the sense that an immense amount of capital was poured into the ecosystem. Eventually, the speculative markets had to cool off and this moved the discussion away from Bitcoin, and on to the underlying technology of blockchain which is now considered to be a majorly beneficial technology for industries and governments around the world.
With this shift in attention and the ongoing global debate on how to regulate the sector, Bitcoin and the rest of the crypto-market waned throughout 2018, which by winter had the industry on the back-foot, forcing blockchain startups and enterprises to readjust their finances in a big way.
What seems logical now, was not actually practiced until it was a little too late, with the lesson being: don’t hold company funds in volatile crypto.
Consider this, an industry that miraculously rose to glory on the back of a volatile and speculative digital currency, Bitcoin, has also fallen fathoms due to the now ten-year-old crypto and the seemingly intrinsic connection of value to it that other cryptocurrencies have. An article on Bloomberg on 6 December 2018 shed light on the troublesome topic, detailing the collapse of startups and the layoffs that were unraveling. In addition, a previous report on 12 September 2018 compared the situation to that of the Dot-Com crash.
Major firms such as ConsenSys, STEEM, ETCDEV, and others were reporting layoffs while in tandem, the ICO startup market also fell sharply. 2018’s crypto-winter signaled a need for change for the blockchain industry, one that had already been alluded to with the increasing reports of stablecoins rising to prominence during these difficult times as foreshadowed by investment firm Morgan Stanley in March 2018.
With fewer startups raising their desired funds, and market uncertainty stifling crypto-economic activity, the blockchain media was also hit relatively hard, causing PR firms, ICO marketers and media outlets to also re-structure their businesses.
Blockchain and crypto-related media are known to be a pay-to-play facet of the industry. From fledgling startups to behemoth companies, this side of the business offers exposure in the form of featured articles, bought and paid for by the respective company, as well as press releases and article mentions amongst other means.
For the media companies who often pay their employees in crypto, this meant that the once neverending supply of well-funded enterprises and startups who were flocking to gain media attention were no longer able to afford the costs required to have their project seen on the pages of industry news websites. In turn, the space appears quiet, inactive and pessimistic, giving the doubters and naysayers all the more reason to declare the industry as dead.
This new technological frontier has done well surviving off of optimism and perseverance, but in the wake of a reality-checking market downturn, we can only hope that enterprises and companies around the world take heed and consider uncoupling the financial fates of their business from uncertain market assets. Instead, they could adopt a more realistic long-term view that can weather recessions and market downturns, one that minimizes the reliance on cryptocurrencies.
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