Bitcoin and altcoins are likely to under go a 90 percent “mass market wipe out” within the next 12 months that would leave only very few survivors and the top cryptocurrency may lose its dominance in due course, GP Bullhound, an investment bank serving mainly the technology sector, said in a report.
“Cryptocurrencies will experience a heavy correction of up to 90 per cent in the next 12 months and very few companies will survive this correction,” Sebastian Markowsky, GP Bullhound director and main author of the report titled “Token Frenzy: The Fuel of the Blockchain”, wrote.
“While this correction will be critical to cutting through the hype, its lack of impact on financial institutions will create new phenomena that we have never seen in any previous bubble burst.”
“Nonetheless, once this ‘crypto-winter’ passes, the growth dynamics for the precious few survivors will be unprecedented,” he added.
GP Bullhound was very optimistic regarding Ethereum and showered praise on its co-founder Vitalik Buterin for making adoption of blockchain a reality.
“People will become more cautious towards second generation protocols. Aspirational upstarts such as Dfinity, RChain, Cardano and Tezos will have to do much more than simply technically outperform to win market share,” the report said.
“They will, however, keep the pressure on Ethereum to implement long overdue changes. Ethereum will keep its position as the clear leader and become the most valuable cryptocurrency by market cap.”
The investment bank expects giant initial coin offerings, larger than that of Telegram’s $2 billion round, by April 2019. ICO success would depend on execution track-record, transparency and credibility of founders.
Further, GP Bullhound expects this year to be defined by asset tokens or tokenization of assets, or TOA offerings, also strongly driving the adoption of Ethereum for financial applications.
Consequently, the cryptocurrency market could spike rapidly and peak at a total market cap far beyond $1 trillion and the volume of tokenized assets will exceed ICO volumes of 2018, the bank said.
Token airdrops are also expected to rise this year and venture capital funding pre-ICO is expected to climb to over $20 million for successful rounds.
by Jyotsna V