This post is also available in: Deutsch
Some analyses show that the cryptocurrency market is now officially in its longest bear market ever, which is causing some coins to really feel squeezed for results, especially NEM (XEM)
The NEM foundation recently announced they would be laying off staff and restructuring entirely and pinned a lot of the blame on the bear market. Their statement explained the radical changes as warranted since it is their “duty to act quickly to ensure the longevity of the NEM Foundation ecosystem and development”. Upon further reading of the report, it does highlight significant signs of bad usage of funds due to “very little accountability for funds”, such as selling 9 million NEM a month, which is currently valued around $360,000 USD. They are now “proposing a budget with a burn rate reduced by about 60% from its previous level”.
Probably unintentionally, but this may be Dash's long-term game: just keep plugging along while everyone else is collapsing.— Joel Valenzuela (@TheDesertLynx) February 1, 2019
These revelations for NEM are partially arising from what is now being called the longest bear market in cryptocurrency’s history. It is now longer than 410 days, which was the length of the previous bear market in 2013-2015 when the Bitcoin exchange price dropped from around $1,000 USD to around $100 USD. the extended bear market is causing mixed reactions of what will happen next, including a longer bear market, a recovery, and a new normal of relatively stable exchange prices. Either way, the past year has illustrated that cryptocurrencies and their developers have to be ready to adapt to changing scenarios.
"Don't die" is a great strategy! 😅— Joel Valenzuela (@TheDesertLynx) February 1, 2019
Clearing the market
2018 was a wild year for cryptocurrency with fast highs that only got faster and higher, which people kind of knew deep down would not last, but also did not want to prepare for that reality. The ICO craze created numerous tokens that had no clear added value for consumers, yet still had multi-million dollar valuations. These ICOs and other coins with no clear purpose were diverting valuable resources away from the coins with real use cases that provided value to consumers. However, the bear market is now providing a clearing mechanism to separate out the coins that have an underlying value and those that source most of their price from speculation.
This correction is actually a sign of strength of the overall cryptocurrency sector since the market is free enough to clear itself rather than requiring external forces. The historical precedent for quick, self-correcting recessions can be seen in early American history such as the Panic of 1907 and The Forgotten Depression of 1920-21. Both of these historically demonstrated that if markets are left alone, then they will clear themselves of waste and set the stage for future prosperity. Many of the over 2,000 coins listed on coinmarketcap will go to the wayside, some will adapt and survive, and others will thrive for having always provided value.
Dash focused on providing real value
Focusing on real use cases has been one of Dash’s top goals so individuals can use Dash in everyday transactions as digital cash. Part of this involves focusing on developing Dash’s InstantSend, which is now automatic, to enable seamless merchant transactions that are as fast as what merchants and consumers currently use. Dash also focuses business development and community outreach to increase the number of merchants that accept Dash, currently over 4,600 merchants, so consumers can increase their overall utility. Then Dash is involved in remittances, point-of-sales integrations, exchange integrations, charity integrations, and many more that all enhance consumers’ ability to achieve financial and monetary independence in everyday life.
The evidence of Dash’s success can be seen in most recent transaction numbers that show not only is the overall number of Dash transactions increasing, but the overall median and average transaction value remains low. This helps illustrate that people are using Dash for smaller, everyday purchases rather than occasional, large purchases. Dash has been able to focus on these key usable developments so well because of its Decentralized Autonomous Organization (DAO), where financially vested Masternodes vote each month on how to allocate 10% of the block rewards from the treasury. The economic incentives of Dash keeps the vast majority of individuals within Dash working hard towards real and realizable developments rather than focusing solely on fluff like other coins. This focus on actually providing real value to consumers and merchants, and thus being demanded by them, is what makes Dash more robust against the bear market than other coins.