Historic Q2 at a glance:
- All time high market evaluations for all cryptocurrencies
- ICOs emerged as an important industry force
- The asset class diversified and bitcoin’s total dominance waned
- Hints of mainstream acceptance by professional investment sector
Industry numbers CoinDesk tracked for this 115-page report describe a historic Q2 for blockchain technology. The story begins with the highest level data point – the cryptocurrency market cap had a $75 billion rally, from $25 billion to $100 billion. Another way to put it is that the total market value of blockchain tokens skyrocketed fourfold to an all-time high above $100 billion.
ICOs emerge as ‘killer app’
ICOs helped propel this growth and established a powerful trend in Q2. The supply of new tokens exploded and crowdfunding and investment returns stunned the world. An entire group of people checked their phones compulsively to see if they had become millionaires. Many did.
This boom led CoinDesk to launch its own ICO tracker. One useful metric we tracked that underlines ICO dominance is how much more successful ICO’s were versus traditional VC funding in the blockchain industry.
The upshot is that ICOs emerged in Q2 as the world’s most important crowdfunding tool, outstripping all time successes of Kickstarter and any other platform.
Mixed sentiment around ICOs
As part of the State of Blockchain, CoinDesk runs a sentiment survey that leverages its global leading readership base. This quarter’s survey had over 1,300 respondents from all over the world, with nearly 30 percent being industry professionals. The survey captured unease around token mania and underlined some of the questionable token supply in the marketplace.
Key price indicators and professional signalers
Ethereum ICOs sent out mixed signals and stood out as both a reason for optimism and a reason for concern. Mixed signals like this may gain some clarity going forward, as expertise in evaluations and other key price indicators took important strides in Q2. A wave of new cryptocurrency-focused hedge funds and buy-side specialists were formed in Q2.
These new entrants are pioneers writing the book on price and value indicators for ICOs. CoinDesk aims to help this effort through its own market center, launched in beta form last month.
These new data points are necessary because of the incredible diversification of coin markets that emerged in Q2’s ICO run. In 2017, bitcoin’s total domination of the ecosystem shrunk considerably. At the start of the year, bitcoin represented almost 90 percent of all the value in cryptocurrencies. By the end of Q2, that number tracked down to almost 41 percent.
While the market diversified, bitcoin’s growth remained impressive with all metrics we track up. Ethereum continued its run with growth across its network, as State of Blockchain tracked spikes in transactions, trades, hash rate, block sizes, and total distinct addresses.
At CoinDesk, we couldn’t ignore a price event that correlated with our own industry gathering, Consensus 2017:
Taken as a whole, growth in cryptocurrencies was unprecedented. With recent news out of China regarding ICOs, as well as developments from the U.S. Securities and Exchange Commission (SEC) and Commodities and Futures Trading Commission (CFTC), our next State of Blockchain promises to have a major focus on regulatory developments. In the meantime, our Q2 report catalogues regulatory developments around the world over that time period.
Industry search queries gathered an immense amount of attention. Google searches for the technology were at an all-time high in Q2:
This has brought increased sophistication in investment techniques and strategy, along with more traditional investors coming into the industry.
In acknowledgment of this push into the mainstream, and as a result of the incredible and jaw-dropping Q2, CoinDesk will host an institutional investor event for cryptocurrencies on November 28 in New York City. Our goal is to bring specialists from the investment industry together with those pioneering the buy side and sell side of a new asset class.
The timing of the event is a sign that bitcoin has carved out a niche within professional investment circles. The names we have already confirmed for the event support this idea. While the underlying numbers for Q2 made this possible, the current State of Blockchain comes from years of hard work and dedication by everyone in a now (much) larger industry.