On December 16, 2017, Bitcoin experienced a height in the market that it wasn't ready for. It hit a whopping price tag of $19,500 before cascading down to just under $7,000 by February 5, 2018. But since then, the cryptocurrency has somewhat normalized itself, only dipping below $7,000 on a couple of occasions and holding firm between that bottom and a height of $10,000.
With less volatility, companies building products (or mining services) around cryptocurrencies like Bitcoin should be breathing somewhat of a sigh of relief. While the news surrounding cryptocurrency has slowed a bit, that may be a good thing for businesses that wish to grow by harnessing the various options in the space without scaring off investors.
Here are some things to know about the space if you're thinking about getting in, or back into, the cryptocurrency space whether on an individual level or as a business owner.
It isn't simple to convert fiat to cryptocurrencies.
Not only can it take a long time to convert from fiat to cryptocurrencies and vice versa, but many entities charge a hefty transaction fee. Due to a lack of many options and a dearth of regulation, the entities surrounding conversion are making a killing and frustrating consumers in the process.
With challenges come opportunities. For instance, a company like CoinMetro has gone out and raised $8.5 million to create a competitor in the space that offers a platform for crypto trading, including the acceptance of USD, EUR, GBP to cryptos like Bitcoin, Ether and Ripple. It is also offering unique ETCFs, which are essentially ETF's but based on hand-picked baskets of digital assets. Most importantly, the site is offering instant withdrawals, which should make the transfer back from cryptos to fiat much more pleasant for currently disgruntled consumers.
Tokenization is a bit easier, and potentially fruitful.
Small business owners are now equipped with the possibility of providing consumers their products or services in exchange for not only cryptocurrencies, but also digital tokens, if they so choose. The benefits that result therefrom include everything from improving the product or service offered to developing an internal employee-reward system (or strengthening the existing platform).
But the token should be aligned to some other currency, whether it be crypto or fiat. With cryptocurrencies seemingly stabilizing a bit, small business owners may take more comfort in aligning a token structure with a Bitcoin or otherwise.
Price discovery is still a concern.
While the prices of cryptocurrency seem to have become less volatile in early 2018, there is still a concern that it is difficult to determine the proper price of cryptos like Bitcoin, Ether and Ripple. The supply is fixed, but demand is tough to peg. That is important for anyone thinking about investing or using cryptos to keep in mind.