Cryptocurrency markets have endured quite a traumatic couple of years and with so much coverage from mainstream media, it was only a matter of time before regulators took more interest. It’s true and if we recall Bitconnect and much more questionable “ICO’s”, it’s easy to understand why. After all, blockchain is still in its’ infancy and without regulation, there can be no stability.
But what has changed and what does the future hold for blockchain and blockchain startups?
In this article, let’s take a quick look at:
- Crypto Marketing and PR strategies
- The state of Blockchain
- How recent trends might impact companies
Crypto Marketing and PR strategies
Crypto Marketing and PR are the underlying reason as to why most businesses around the world can grow and prosper. It’s true and when it comes to ICO’s and cryptocurrency projects, marketing strategy is even more important.
But why is it more important for this type of industry?
Well, these markets have expanded dramatically over the past few years and there are now thousands of projects in every direction. Needless to say, you need some way of gaining traction amidst this sea of projects and digital marketing is the only way to stand out.
Focusing on Bitcoin
As you know, Bitcoin has fallen a long way since all time highs from a few years go and continue downward in what is clearly a bear market. Coincidentally, the bitcoin blockchain has also experienced a rather drastic reduction in terms of transactions on-chain. As if that’s not enough, miner revenues and fees have declined significantly. On the other hand, hashrate reduced as the year progressed and this is critical to the long term security of blockchain.
Needless to say, hashrate refers to the amount of computing power it takes for transactions on the blockchain and he should assure blockchain companies rather than be a cause for concern. What’s more, the reduction of transactions on bitcoin’s blockchain was a result of growth due to the lightening network.
Moral of the story: Bitcoin should still be central to the long-term strategy of any blockchain company.
Initial Coin Offerings (ICO’s) and Budgeting
It’s true that ICO’s and blockchain companies endured a very stressful year heading into 2020. Investor interest peaked but as the last couple of years progressed and the price of bitcoin declined, the financial power of ICO’s followed suit. That is to say, many ICO’s are now under serious pressure to cover costs and stay relevant in this increasingly competitive space. On the other hand, reports show that ICO’s and blockchain companies continued to move forward and exceed milestones set for their respective projects.
One thing we know about starting in 2020 is that this is sure to be a very uncertain year and blockchain companies will need to be as frugal as possible to prepare for whatever happens. After all, lack of funding is the main reason why so many projects are likely to fail over the next couple of years. With this in mind, companies should focus on cutting expenditure and transitioning to a smart budget with marketing tactics that provide more return for their investment.
Concerns about Ethereum
Vitality Buterin, the founder of Ethereum, has been quite cryptic as of late with announcements and comments that many consider negative or even worrying. However, the SEC declared that Ethereum was not security which was a major development for Ethereum. Also, in recent months, Buterin also indicated that Ethereum has a planned solution for scaling on the way and if successful, this is likely to bolster confidence within investors.
For this reason, both investors and blockchain companies should take comfort in the fact that there has been no news or reports to suggest that Ethereum is in trouble. In fact, with so many ICO’s moving forward at lightening pace, there is reason to believe the complete opposite.
As with any speculative market, blockchain companies can only work with what they have available and continue to do so until something changes.
The State of Blockchain in 2020
Regulation for Blockchain Companies
As already mentioned, regulators have taken a lot more interest in cryptocurrency markets. Quite often, the problem for these regulators is the question of how to classify these companies? For example, are they securities or commodities?
Needless to say, without this classification, there is now way to establish any regulations.
At the same time, while regulation is a cause of concern for many investors and companies, it seems naïve to think that regulation is not needed or will not happen. In short, blockchain companies should embrace whatever happens and seek to have a positive influence on such events rather than fear what might transpire as a result of these announcements.
Investments in Blockchain
When bitcoin was reaching a peak a few years ago, the market cap for cryptocurrency was approaching an incredible $1 trillion. However, this figure has since diminished to just a fraction of that number with most investors deciding to sell and in many instances, cut their losses.
At the same time, as prices continue dropping down to more and more resistance levels with dramatic increases, there is a notable correlated increase in volume. With this in mind, the markets look to be setting up for an extended rebound of some kind but at this time, investors can only speculate and wait for the market to decide.
Either way, there is every reason to believe that the future is bright for blockchain, and with the same fundamentals, companies can expect increased certainty and more investor confidence.
Blockchain Market Sentiment
Cryptocurrency markets are highly sensitive to news and most often move depending on sentiment or speculation. In truth, the vast majority of investors were hurt by the sudden decline in cryptocurrency markets. As time passed, many of these investors continued to hold and volatility ensured that even the most experienced traders were on the losing end of trades.
What’s more, as we move into the new-year, traditional markets have been experiencing uncertain times and there is an obvious correlation between blockchain these markets. It’s no wonder so many people have lost interest when it comes to investing in cryptocurrency and it remains to be seen what direction the market will take in the short to medium term.
Cryptocurrency Trends in 2020
For many investors, cryptocurrency is a speculative market to be avoided. In other words, the volatile and controversial nature of cryptocurrency has left a bad taste in the mouth of investors who seem to have lost more than they can afford.
But is this enough reason to ignore the markets in 2020?
As you know, crypto markets ensured an incredibly bad year in 2019 and continue to decline in what is clearly a bear market with a rebound this year. However, there is more than enough reason to suggest that the markets will stabilize even further after COVID-19 and investors can feel more confident or at least comfortable about where they invest their funds.
With this in mind, here are five cryptocurrency trends to help guide your investment strategy 2019:
1. Emotional Investing
In the last few years, many first timers got caught up in the euphoric rise of the markets. Unfortunately for many, investing in emotions is not a smart or rewarding strategy.
In recent months, we hear little about regulation, laws, or significant changes that might impact the crypto markets. However, we must consider this going forward and expect great changes to take place during the next potential bull-run.
For example, you can fully expect the Security and Exchange Commission (SEC) to step up their efforts as the crypto markets grow. That is, when the spotlight returns to, it’s likely that we will see legislation introduced or announcements from the SEC.
With this in mind, we should be prepared to adjust and react to any important news. Now, that’s not to say you should be trading the news but rather that markets change and traders should be willing to act when something important happens.
But how can an investor counter this kind of news?
Well, aside from having a stop-loss, it’s impossible to react to something we don’t already know. However, it’s important not to allow our emotions to decide any investments.
Take XRP for example. Ripple is already working with a number of banks and professional organizations. For this reason, many crypto enthusiasts are likely to feel anger or at least resistance with the prospect of investing in the XRP token but the truth is, investing in XRP makes sense to professional traders.
You see, while this token is the arch nemesis of crypto enthusiasts, professional traders are more concerned about protecting their investments in this volatile market. In other words, they will likely diversify into XRP, regardless as to whether or not they agree with “what the token represents”.
As with any market, diversification is extremely important for an investment strategy.
That is to say, for those who focused on Bitcoin only or just one or two alt coins, the returns were usually more limited than those who diversified. At the same time, this also meant that when anyone’s cryptocurrency declined significantly, investors who diversified were far more comfortable than those who did not.
If you need any more convincing in terms of diversification, take a look at every hedge fund manager around the world. In every instance, they always place an emphasis on diversification so as to reduce risk and maximize returns.
You will often hear analysts or commentators speaking about the “fundamentals” in cryptocurrency. It’s true, fundamentals are incredibly important as in spite of what seems like constant volatility in the market, the fundamentals rarely change.
In fact, throughout this intense downturn over the past eleven months, most cryptocurrency projects continue to make progress without any reason to suggest that they will “fail”. Now, some suggest that many of these projects are likely to disappear in future and this is also true. However, the reason for disappearing is likely to be the result of a project running out of funds rather than the team failing to make progress with the project.
But what does this mean?
It means that the team is the most important and constant fundamental of a project. More specifically, it means that you should look closely at the people behind the project and ascertain if they are reliable enough to deserve your investment.
As an example, **Stellar Lumens is run by Jed McCaleb, founder of Mt. Gox and co-founder of Ripple. McCaleb has amassed an incredibly talented team to work on Stellar. Meanwhile, **Basic Attention Token (BAT) was created by Brendan Eich, the co-founder of Mozilla and creator of Java Script. As a result, Eich has the most experienced technologists and programmers working on the project.
**These are purely examples and not recommendations.
4. Strong Leadership
If you take a look at the top cryptocurrency projects by market cap, one aspect of these projects is quite clear – strong leadership. Needless to say, Bitcoin does not need a leader to spearhead the project but strong leadership has been an integral reason for the success of every other project.
Vitalik Buterin and Ethereum. Charlie Lee and Litecoin.
You might not necessarily agree with any of these figures but make no mistake; they know how to create value, confidence, and publicity. For this reason, when times are turbulent or things are not going to plan in crypto, you can at least rest assured that you have a reliable leader to keep tabs on the issue and give the project a lift whenever needed.
Moral of the story: choose crypto projects with a strong or proven leader.
With more than 2,000 cryptocurrencies in the market, investors can sometimes feel overwhelmed but the truth is, while change is inevitable, trends are recognized for a reason and these trends should be a guide to every investment strategy in 2020.
About the author
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