What 2016 Holds for Bitcoin Businesses… Was Charlie Right?
For this week’s Views on the News, we thought we’d do something a little different.
Towards the end of last year, Charlie predicted what he thought 2016 held in store for bitcoin businesses. As we enter the second half of this year, let’s take a look at those predictions and see how he got on.
Correct: 1 point
Nearly: 1/2 point
Flat out wrong: 0 points
Bitcoin companies with just one business line will increasingly become disintermediated by those that offer multiple services.
Partially correct. It’s certainly better to have a multiple offerings rather than just relying solely on the revenue stream of a wallet offering (hard to monetise) or a payment gateway (hard to breakeven on lacklustre consumer flows). However, if your one business line is an exchange then you may survive. That said, your competitors that offer exchange and wallet services will, no doubt, slowly eat your lunch. Points: 1/2
Investor clamour for all things blockchain will return full circle as blockchain start-ups begin to partner with more established bitcoin businesses.
Partially correct again. I think it’s fair to say that standalone blockchain based business models aren’t attracting as much attention as they did previously. Why is this? Possibly because none of them have found a path to profitability yet. There has also been something of a backlash against ‘private blockchains’ which has made potential investors think twice. Points: 1/2
Sadly, more bitcoin businesses will close or consolidate.
Correct. Some have given up, some have been ‘acquired’ and some have merged. It will continue to happen. Points: 1
Bitcoin adoption will continue to move slowly forward – mass consumer adoption is still in the future.
Correct. At CoinCorner, we have seen an increase in volumes and sign ups but I think all industry participants would agree that it’s still slow progress. Survival of the leanest (or those sat on the most investor capital and not paying a return!) remains the order of the day for now. Points: 1
The relationships between banks and bitcoin business will begin to thaw as more sophisticated bitcoin compliance solutions come to the market.
Hm, if my school geology knowledge can be relied upon, the last Ice Age continued for 10,000 years. I’d hope bank resistance to bitcoin will have melted by then, but it’s still a very slow thaw. Mainstream banks have zero risk appetite and, rightly or wrongly, they view bitcoin as a risk. Suffice to say, Stuart Gulliver isn’t knocking on our door with some HSBC account opening forms. We’ll give him 1/2 a point for morale purposes. Points: 1/2
We will see fewer and fewer pure bitcoin start-ups – those that already exist now have too much of a head start.
I think we can agree with this one, for those who had thoughts about launching ‘mainstream’ bitcoin businesses, the bitcoin boat has now sailed. The incumbents have too much of a head start so gaining customers for a new exchange, wallet or payment gateway will be very difficult. This is good news for CoinCorner as we celebrated our 2nd anniversary last month and start to look a granddad of the bitcoin world. A very nice, trendy and innovative granddad of course! Points: 1
Bitcoin legislation will begin to evolve at a faster pace and will help give the sector added credibility.
If you are a client of CoinCorner (and let’s face it, that’s all that matters really!) then this is certainly true! Unless you’ve been sleeping under a rock recently, then you’ll know CoinCorner recently became a Designated Business and is now registered with the Isle of Man Financial Services Authority. This means we are now more credible than ever and you can all sleep easy 🙂 Points: 1
There will be more fraud related to altcoins.
Those pump and dump merchants are alive and kicking, beware! Points: 1
Investment in the sector will plateau until consumer adoption dramatically increases.
If we look at the preceding 4 quarters of VC investment in the sector according to CoinDesk:
Q1 2015 at $228 million
Q2 2015 at $145 million
Q3 2015 at $85 million
Q4 2015 at $26 million
Q1 2016 at $160 million
We can see there was a downward trend in 2015. This surprised on the upside in Q1 2016 but the figures were helped with the inclusion of DAH’s $60 million raise. Leaving aside the odd mega deal we think it’s fair to say that investment has plateaued, at least for the moment… Points: 1
The price of bitcoin will remain relatively static around the $200-$300 range.
Errrr, less said about this one the better. To borrow Terry Wogan’s phrase “nul points” (add you own French accept please). Still, if there was one to get horribly wrong, I’d have chosen this one! Points: 0
Total predictions correct: 7.5 out of 10
Like so many of Charlie’s school reports, he must try harder!
What were your 2016 bitcoin predictions? Let us know your thoughts in the comments below…