The market, which stood at its peak of over US$800 billion in January 2018, closed the year at around US$125 billion, a drastic plunge from its earlier position.
In the history of the crypto market, last year was the worst so far. Its volatility led to a sudden dip in the prices of various cryptocurrencies, resulting in a loss of confidence in market profitability and stability.
This might not be unwarranted considering the market itself lost grounds by over 80 per cent, which amounts to about US$700 billion in total capitalization.
Surviving the crypto winter
As markets continued to decline throughout 2018, we saw many blockchain companies struggling financially and eventually having to conduct layoffs.
For instance, Bitmain had the ignominy of laying off nearly 50 per cent of its workforce. Steemit Inc. had a bigger percentage cut and laid off 70 per cent of its employees.
Nem is another keynote example in struggling to survive the bear market as the company looked at laying off its entire staff to focus on restructuring.
ConsenSys, in the wake of the market downturn, also announced a major restructuring tagged ConsenSys 2.0 which resulted in the company laying off 13 per cent of its labour force.
Several other companies like Kraken, Coinfloor, Status, and Po.et also announced layoffs in order to streamline their operations whilst fighting for survival.
Beyond the rubble">Beyond the rubble
While 2018 proved itself to be a very bad year for the market with many losing confidence in its recovery, the good news is, the crypto market is going through a state of purging.
A state of cleansing.
These bear markets are when the best things get built.
Let뭩 look back at 2016, when many companies died within an 18 to 24 months runway.
A good example is the Zapchain shut down which happened less than a year after it had raised a seed fund of over US$300,000.
A number of companies also ended up in acquisitions.
CoinDesk, for instance, was acquired by Digital Currency Group (DCG) in January 2016. Another case would be the acquisition of Bitnet by Rakuten in order to develop a blockchain lab focused on research and development within Rakuten.
Several other acquisitions also followed through ?ChangeCoin and Skry.
The next bull run was in 2017, many of the companies that closed weren뭪 there to see the new spike. However, those who survived became bigger and stronger.
In 2014, the market stood at its peak. Blockchain projects raised over $300 million in VC funding alone. This was over three times the funding got in 2013.
The rapid growth in interest was a result of the high optimism surrounding bitcoin at the time and the prediction of its ability to disrupt and change the future.
However, the market crashed from 2014 to 2016. A huge number of blockchain companies closed down or were 밶cqui-hired?
Nevertheless, following the past trends and history of the market, the next bull run might be in 2020 which also falls in the same time frame of the Bitcoin halving. Consequently, as the block rewards go down, prices can go up.
Although it might not moon like previous times, it seems halving is the only catalyst so far. At that time, projects runway will be extended.
Some projects still stand out in the midst of the downturn
In the midst of the current market situation, some blockchain companies still maintain outstanding performance.
A profound example would be NEO. Founded by Da Hong Fei in 2014, NEO is an Open Network public blockchain for smart economy. After two years of doing public blockchain, the demand for a private/consortium blockchain for enterprises increased.
This inspired the creation of another company called Onchain ?a company providing blockchain solution to business and sometimes to local governments in China.
Still, most of the consortium blockchain developed by the company often ended up in the concept stage or pilot stage ?never graduating to the production stage.
Soon after, proper research was conducted and the company realized there was a need to link the blockchain world and the real economy, hence the creation of Digital Identities