Cryptocoin Market Dilution – There Are Too Few Dollars Chasing Too Many Cryptocoins.
Visit any discussion on the Internet and the question asked more than any other is “When will coin X rise in price?” The answer seldom if ever heard is “never” Why? Cryptocoin market dilution. Simply speaking there are more coins out than investors able to buy enough to move the price in any meaningful way.
To put cryptocoin market dilution into perspective let’s look at the all-time high number of IPOs on the United States stock markets. There were 848 IPOs in 1996 raising $78.6 billion (Source: CNN Money). Now let’s look at 2017 ICO statistics; 913 ICOs raised a total of $5.6 billion (Source: Business Insider). And that’s GLOBAL – encompassing the US markets and the rest of the world.
Numbers don’t lie; there aren’t enough investors to support all of these different coins. I suspect this is why Bitcoin pricing is struggling to gain footing past $9,000 to let alone $10,000 and not even dreaming of reaching it’s high of $19,000+ just two months ago. That’s also why other coins aren’t exploding in value; cryptocoin market dilution makes it impossible for a sufficient number of cryptocoin investors to make a significant difference in any given coin’s price. Long story short? There’s not enough money to go around so cryptocoin values remain stagnant.
With cryptocoin market dilution clearly evident I forecast a lot of coins will crumble and drop off the cryptocurrency markets due to lack of investor interest, frustration with ROI, etc. leaving the big coins on the block left standing; Bitcoin, Ethereum, etc.This will become more apparent in 2018 as even more ICOs are expected with all of these altcoins further diluting cryptocurrency markets.
I see two silver linings in these clouds of cryptocoin market dilution: Weiss Cryptocoin Ratings will empower investors to make informed decisions on a select few cryptocoin investments (which will starve out the rest) coupled with an inevitable rise of Bitcoin prices followed in tandem by BTC’s little brothers ETH, BCH and LTC.