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While the cryptocurrency market was especially promising at the start of 2018, it didn’t take long for the market to take a surprising dive. Even the most devoted investors were left wondering how low prices would drop before stabilizing. Taking the time to understand how this sudden and deep drop occurred may shed some light on the future of the market.

Too Many Initial Coin Offerings

As the cryptocurrency market exploded in 2018, it was flooded with over 1,000 initial coin offerings (ICOs). This means there were more than a thousand different coins offered within the year, and the most eager investors couldn’t keep up with the saturated market. Although the Securities Exchange Commission attempted to regulate cryptocurrency offerings, their new rules didn’t take effect in time to stop the flood of ICOs. As a result, eager investors bought up those new offerings without realizing 90% of them were doomed to failure.

Government Intervention is Needed

While the SEC rules weren’t enacted in time to prevent market saturation, they may help prevent another similar fiasco. By enacting new regulations, the SEC may help to keep the 90% of bad cryptocurrency risks from ever seeing the light of day. This can help protect new investors who only have a slight grasp of cryptocurrency. With fewer high-risk opportunities in the market, the chances of widespread losses are minimized.

Success Relies on Blockchain Adoption

Blockchain is the fuel that drives cryptocurrency, but, unless it’s adopted on a large scale, it won’t help the market’s performance. Blockchain technology is intended to change the way we do just about everything online from buying real estate to managing our schools. It’s intended to be a safer and more secure way of using the internet, but, unless it’s adopted on a large global scale, its use will be limited, and the cryptocurrency market will continue to flounder.

What does all of this say about the future of cryptocurrency? No one knows for sure. Some believe the value of Bitcoin and other forms of cryptocurrency will rise as suddenly as it has fallen, which is good news for investors. Others believe the popularity and value of cryptocurrency has only started to decline. In truth, the only wise course of action is to keep a sharp eye on cryptocurrency trends in the coming year.