Rise and Fall of digital currencies in 2017

By Carmen Corral

Last year was an undoubtedly remarkable year for cryptocurrencies. All together, 661 new cryptocurrencies came into play during 2017, including altcoins. The market is growing fast and new investors don’t want to lose this opportunity, including some big financial firms, which joined the ecosystem too. Cryptocurrencies were present in more and more forums. Blockchain and digital currencies ignited the interest of big players across a variety of industries. The market attracted more than just investors and tech savvies. Bitcoin and “how to buy bitcoins” were in the top 3 search results in Google in news and how-to categories. An impressive 78.5 percent of Americans have at least heard of Bitcoin. So what does it all mean?

Financial Firms Joined the Party

Financial firms realised some time ago the seemingly endless potential of crypto and last year more organisations joined the market. This market was historically a startup enterprise. Now, with big corporations in the game, startups could struggle to compete with these big players. This remains to be seen.

ICOs, the new trend in crowdfunding

Initial coin offerings, or ICOs, represent a new form of crowdfunding. Companies create tokens to raise money for their projects. They are considered a high-risk, high-reward investment. ICOs were traditionally used to fund the development of new cryptocurrencies. Nowadays many different kinds of projects are being funded through this novel form.

Hacking attacks on cryptocurrency market

A few high-profile cyber attacks happened in 2017. CoinDash, Parity Multisig Wallet, Veritaseum wallet, Enigma’s ICO and Tether were some of the most notable victims. However, this doesn’t seem to discourage new and veteran investors to get on board the crypto scene. As a response to hacker cryptocurrency, the market seems to always find a way to fight and bounce back.

Digital currency bans

In September, China became the first country to ban cryptocurrency exchanges. First, it banned the ICOs and later all Bitcoin exchanges. This caused a temporary drop in digital currencies worldwide. But it didn’t last; the market recovered in less than a month, which reiterates the undying question: can crypto be efficiently regulated?

Blockchain interest outside of finance

The technology behind cryptocurrencies proves to have much wider applications. Healthcare and real estate are some of the potential uses that blockchain technology could have to ensure records are more accessible and secure, while also opening the gates of transparency, bringing a whole new meaning to the term client trust.

Performance of main cryptocurrencies in 2017

The overall cryptomarket was steady during the first few months of the year, increasing from May on with ups and down until reaching a record-breaking high point at the end of the year.

The high volume of transactions Bitcoin had to manage proved difficult, logistically. Scalability began to be a big problem for the pioneer cryptocurrency. After extensive talks, Bitcoin made the the decision to split the coin for efficiency and long-term growth options. This new cryptocurrency inherited the transaction history of the Bitcoin on its release date, Aug. 1, but all subsequent transactions were separate. Just nine days later, the new Bitcoin proved more profitable than the original one. But true to crypto form, profitability has switched repeatedly between the two since them. Bitcoin Cash from $320 has increased to $2,553 struggling with huge oscillations, in particular during the first several months after its release.

Bitcoin

Despite the hype, 2017 wasn’t the best year for Bitcoin. By mid-July, Bitcoin had fallen 36 percent to $1,869. It took off the following months only to decrease again at the very end of the year. Concerns about slower growth compared with other cryptocurrencies and the matter of a “fork” in Bitcoin Cash caused the summer fall. By our predictions, though, Bitcoin Cash doesn’t seem to be in line to harm Bitcoin in the long-term. We recommend keeping an eye on this one.

Ripple

Ripple ended 2017 as the second-largest cryptocurrency by market capitalisation with $77.1 billion, overtaking by popular vote Ethereum’s $72.9 billion. Although way behind Bitcoin, both rose quickly throughout the year.

Ripple started the year at $0.0065 rising to $2.25 at the end of the year — an increase of around 31 percent.

Ripple Token is used to facilitate the global payments of banks and other financial institutions. The announcement that American Express and Banco Santander will use Ripple blockchain in some cross-border transactions was a big trigger for investors to buy into this digital currency. Ripple grew more than 700 percent in December alone.

Dash

Dash was another great player in 2017, increasing around 9,400 percent during the year, reaching its peak of $1,595.76 in December.

Dash, designed to act as peer-to-peer decentralised electronic cash — as liquid as real cash — was built upon Bitcoin’s core code with popular privacy and quick transaction features.

Ethereum

Ethereum had a solid start to the year. The first five months showed increases of more than 5,000 percent. Following a four-month phase of consolidation, Ethereum emerged with force in November before slipping back into a slight reversal in December.

Ethereum was created with the promise of offering that which Bitcoin could not. Ethereum blockchain can’t be altered, tempered or hacked. This tamper-proof feature makes it an interesting application for many uses. We definitely have our vision locked on this key player in 2018.

IOTA

IOTA was a new player in 2017 with a great performance for a newbie in the market. Having launched in June, it increased 1,356 percent since then, growing more than 1,700 percent for about seven weeks to reach its highest point in December at $5.80.

A currency to watch this year, IOTA was created with the objective of making transactions fast, light and more accessible. IOTA uses Tangle, a revolutionary ternary method, based on DAG technology and is the first cryptocurrency without a blockchain.

Litecoin

Litecoin market cap at the end of December was $13.95 billion with an increase of 6,025 percent during 2017. It reached its all-time high in May and then again in December.

It is one of the oldest digital currencies in the market. Developed in 2011 as an alternative to Bitcoin, it has a very similar technology with a few advantages such as higher transaction speeds.

Monero

With only brief ups and downs, Monero was a relatively stable performer in 2017, with increases as great as 2,596 percent with a market cap of $5.95 billion.

With Monero, all transactions are completely confidential. This is the main appeal of this digital coin. Sender, receiver and size of the transaction are untraceable.