What does the future hold for altcoins this year? One industry scholar predicts a number of altcoins will disappear, another believes the current market environment is favorable for these tokens, while a third points out that we may need a change in terminology.
Bulls reigned supreme in the markets at the end of 2020, as this week we once again witnessed price volatility. Bitcoin (BTC) has fallen 20% from its historic ATH reached a few weeks ago, Ethereum (ETH) has fallen 23% from its weekly high, and many altcoins have followed suit and corrected to the drop. For now, crypto markets remain mostly green, with prices appreciating for six of the top ten cryptocurrencies on the market.
That said, industry leaders see both the demise and prosperity of altcoins, which seems to boil down to three areas: technology, positioning, and use cases.
1. Trilemma, cemetery and place in the world
Sinjin David Jung, managing director of IBMR.io (International Blockchain Monetary Reserve), which is a long-time partner and supporter of Algorand (ALGO), told Cryptonews.com,
In general, I would expect altcoins that have real potential for use and have resolved this trilemma to some extent to do well.
However, he warned that the future is bleak for cryptocurrencies which have no other use than being a speculative investment: “A lot of altcoins could disappear in 2021-2022.”
On the other hand, if Bitcoin appears to have a well-established presence, it will be crucial for altcoins to do the same and “find their place in the world”.
“Will Litecoin continue to be Bitcoin’s runner-up? Who knows, let’s see what happens during this year, but I think it’s now more about adoption and positioning than technology, “Jung said, adding:” I think any company that is still working on a protocol that has yet to be launched will not be able to get by. “
2. Positive signs
There are signs, however, that major altcoins will not only survive, but could be adopted more widely this year. Konstantin Richter, CEO and founder of Blockdaemon, a blockchain node management infrastructure platform, notes that Bitcoin continues to be the primary driver of adoption by individuals and institutions. However, the large institutional players entering the market, such as PayPal, have not limited their strategy to Bitcoin and also offer ETH, Bitcoin cash (BCH) and Litecoin to their clients.
Mr Richter stated,
This approach seems to indicate that a number of emerging and established altcoins, alongside the two big names of Bitcoin and Ethereum, are here to stay.
3. Find the right name
For those who survive, a name change to something more appropriate may be necessary. Jack O’Holleran, CEO and co-founder of decentralized network SKALE, said we need a better term than “altcoins” because now we have “real networks […] on, “which are powered by real tokens.” This includes networks like SKALE, Celo, Polkadot, Solana, Near, and others which will be known as networks first and tokens second, “a said Mr. O’Holleran, adding,
Maybe we’ll call this category Network Tokens rather than Altcoins.
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