Bitcoin and its altcoin brethren have seen their market capitalizations evaporate in excess of 80% over the past several months. Critics are already claiming that the cryptocurrency revolution, phenomenon, or pipedream (take your pick) is dead, or soon will be by their estimation, but to their astonishment, a major global consulting firm is predicting a very different picture by late 2019. Bitcoin has averaged a 53% market share of system wide capitalization, but A.T. Kearney insists that this figure will grow significantly by the end of 2019.
A.T. Kearney has consistently been ranked among the top global management consulting firms. It presently maintains offices in 40 countries. Revenue turnover exceeds US$1 billion with over 3,500 employees on staff, including 2,300 consultants. The company was founded in 1926 and often appears at international business forums where significant strategic, economic, and commercial issues are duly debated and discussed. The firm’s expertise derives from its focus on strategic and operational CEO-agenda issues facing global businesses, governments and institutions.
The firm’s recent report dismisses the current turmoil within the crypto space and discusses how the entire ecosystem will evolve over the next twelve months. The report explains that:
By the end of 2019, Bitcoin will reclaim nearly two-thirds of the crypto-market capitalization as altcoins lose their luster because of growing risk aversion among cryptocurrency investors. More broadly financial regulators will soften their stance towards the sector.
Courtney Rickert McCaffrey, manager of thought leadership in A.T. Kearney’s Global Business Policy Council, goes on to state further:
Our prediction that Bitcoin will regain its dominance is supported by the ever-growing complexity among altcoins, most recently demonstrated by the “hash war” that occurred in the Bitcoin Cash ecosystem. Additional “hard forks” and the continued lack of consensus among developers about a path forward will further widen the chasm between Bitcoin as the most accessible and widely recognized cryptocurrency and the altcoin community.
Many analysts have attributed much of the recent depreciation in valuations to the turmoil generated from the Bitcoin Cash “hard fork”, but a few disagreements will not destroy all crypto ventures. Steve Russo, Executive VP Eclypses, states:
Some survive and grow up to be explosive enterprises, that have real products and generate real and substantial revenues. Altcoin will follow somewhat that same pattern. Those that are whimsical and have no real value will vaporize, while the real ones will not only survive, but thrive over time.
Aside from other reasons that analysts are fixated upon for the recent death spiral in coin values, the folks at A.T Kearney are quick to point out that the horizontal explosion of Initial Coin Offerings (ICOs) expanded industry offerings far too quickly, and the lack of transparency of most ICOs has led to rampant fraud, scaring many investors from the asset class. In other words, this firm is predicting an industry wide consolidation that would be the natural order of commercial innovation on such a hyped scale.
Yes, blockchain technology may very well be the next wave of innovation, but the path to the development finish line will be exceptionally rocky, as winners and losers sort themselves out from today’s conglomeration.