Eoin Treacy's view

Here is a link to the full report.

Here is  a section:

Based on our companion analysis, we estimate that long-term fundamental demand for and value of crypto currencies – as a class – is likely to come from low-trust sectors of the global economy. • Using estimates of money demand for both transactions and wealth storage in these sectors, we estimate – with generous assumptions – that the ceiling for total crypto currency market capitalisation is between $660bn and $780bn. Importantly, these estimates represent an upper bound for all crypto currencies, not likely fundamental value and do not apply to any single crypto currency. • For perspective, the upper bound is roughly equivalent to the peak sum of all crypto currencies’ market capitalisation in early January 2018. • Using an empirical model of commodity inventory and price behaviour, we decompose weekly Bitcoin price movements into ‘supply’ and demand contributions, and find that since 2015 both inventory and demand behaviour have been speculative. • We show that speculation in crypto currencies appears to be driven by developed economy purchasers and holders. • Developing a theoretical model of speculative investment in crypto currencies that mimics the epidemiological literature, we show that crypto currency price behaviour is determined by the rate of new entrants (‘infections’) and the remaining ‘susceptible’ population. •

The best time to talk about bubbles in the cryptocurrency market was in December when the price was accelerating higher. The market subsequently fell 70% which is a decline consistent with the falls we have seen following other bubbles but obviously not as great as some.

I think at this stage most people are of the opinion that cryptocurrencies and its underlying blockchain are going to be around for a while. After a 70% decline there is some evidence of support building now coming in. However, after such a massive decline some time is likely required for bitcoin to regroup.

When I get back to my desk from travelling one of the projects I’ve set myself is to find reliable price charts for the alt coins because I believe it is in the smaller upstarts that value is likely to be found first, that is course assuming they don’t go bust first.