Violent Delights Lead to Violent Ends: Rebuilding After the Crypto Crash

While emerging assets are always turbulent, 2018 has been an especially violent year for the crypto markets.

Many investors who entered during the bull market of 2017 got badly burned during this year's prolonged crash because they were deluded into believing that market prices accurately reflected underlying value.

Unlike the traditional financial market where we usually tend to have a clear expectation guidance and consensus around valuation models that can align the two, in crypto we have experienced a significant disconnect between investors and developers due to the distorting effect of hype on market prices and an information asymmetry in regards to actual development.

In the past two months, I've had many hours of conversation with key players in all sectors of the industry, including exchanges, traders, miners, founders, primary market investors and regulators.

My conclusions follow regarding why 2019 will be the year our violent delights reach their violent ends.

The underwhelming adoption they face will be a further bear signal to the market that the "Real adoption" investors had been waiting for won't arrive in time to bail them out.

Our failure in managing expectations well will set alternative cryptocurrencies up for a major correction, as the market is also highly correlated with BTC's price.

Although temporary market trends may be brutal, that very condition creates the opportunity for extraordinary returns for anyone who can invests in truly valuable work while it is still massively undervalued by a spooked market.

Silicon Valley's dominance in previous technologies won't necessarily carry over to crypto since it's crypto ecosystem is not complete.

In the near term, market conditions will be brutal, but that is actually helping nurture real value that is simply not reflected in the prices yet.