2018: The Year of the Crypto Hangover?

OWNx Team Global Finance and Economics, Money & Financial Technology

Last year was crazy for financial technology. For several years, FinTech innovation had been bubbling under the surface, until last year when it exploded into the mainstream in the form of the emerging crypto-mania.

2017 was the inaugural ball – the big party where all the possibilities of financial technology were introduced to the public. Cryptocurrencies. Tokenized asset ownership. Peer-to-peer payment systems. Robo investing. It’s a whole new world out there. However, after the party comes the hangover. This could begin to take shape in the second half of the year.

The excitement around crypto currencies and ICOs is likely to reach some kind of temporary peak this year. While FinTech may have had its coming-out party in 2017, there are still few people who understand what is actually happening. That is – the entire global monetary eco-system is being transformed before our eyes.

It is still in the early stages. The final form of what emerges is still several years down the road. Like most new, bright and shiny technologies that gain the public’s attention, it will proceed through the traditional hyde hype cycle.

It appears now as though the peak of inflated expectations is fast approaching. When the crypto ICO frenzy ends – either through market forces, or due to heavy-handed government regulation – the plunge into the trough of disillusionment will commence. With the pace of scam ICOs growing, it would not be a surprise for this to occur in the second half of 2018.

Such is the new world of finance. Meanwhile, 2017 was a relatively quiet year for gold and silver with no major moves in either direction. Gold spent most of the year within a $150 per ounce trading range. With all the hype surrounding the crypto markets, this is quite an accomplishment.

It is unlikely that 2018 will be a repeat of 2017. If the crypto/ICO world begins its plunge into the trough of disillusionment, gold and silver stand to be beneficiaries. Scam digital assets will be shunned in favor of tangible assets with a proven history of maintaining their value.

The 25% plunge in the price of Bitcoin, and the steady rise in the price of gold and silver during the last half of December may be an early signal of what 2018 will look like. Only time will tell. One thing seems certain, however – there is a whole lot of shaking that is going to happen in the financial markets this year. And that nearly always favors gold and silver.   

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