Jim Duffy comment: Is cryptocurrency heading for the mainstream?

While the value of this market is way off its peak, many are still in for the long term, says Duffy. Picture: Ian Howarth.

After the fever pitch rises of 2017, these markets have gone quiet. The companies behind the currencies are beavering away to create essentially great investable companies. But, are you ready yet to buy into the crypto markets?

As I write, the cryptocurrency market cap is hovering at around $134 billion (£102bn). There are more than 2,100 cryptocurrencies listed and Bitcoin has market dominance of 51 per cent. While the value of this market is way off its peak, many investors are still in for the long term.

The carpetbaggers and millennials who were hoping for their small holdings to go “to the moon” have since all gone quiet. No longer the lengthy chats in crypto chatrooms about this coin or that token rocketing. No, it’s radio silence. Well almost…

I have a small holding in crypto and as I have written here before, my favourite is Tron. To be clear, this is no recommendation, and you should always do your own research. I am hoping one day in the next ten years that this particular coin will grow and I can have a surprise pension enhancement.

To be honest, I had forgotten about it as it was a small investment. Somewhat speculative, if you will. But, only last week I received a text from one of those millennial types who had laughed his socks off when I bought Tron initially. Not only did he chortle, but he told others how funny it was watching an old fart dabble in the cryptocurrency markets and buy an outsider with no real hope. Yes, it did feel like taking a punt on a 200/1 shot in the Grand National. But, what a surprise to hear from the laughing laddie again.

The text read: “I’m hearing great things about Dapps. Hope you still have your Tron.” This was as close to an endorsement that I was going to get. But, it made me curious as to how the crypto world was performing. Dapps, by the way, are ostensibly apps that run on the Tron blockchain.

The CEO of Tron, a young entrepreneur called Justin Sun, has been a busy chap. Sun has had much criticism over the last two years as he is a colourful character, not afraid to say it how it is. He has stellar ambitions for his company. In short, to reinvent the internet so that users, instead of Big Tech, own the content and have more control over it. He has the likes of YouTube in his sights. He has worked hard and now, it seems, has some credibility.

Tron is just one of the exciting little gems surfacing and creating companies that have purpose, potential customers, users and some form of end goal. But it has taken, and will take, a long time for these fledgling start-ups to truly be the next generation of tech. However, and this is the important element, credibility is starting to kick in. Only then will institutional investors think about putting their capital at risk.

Bitcoin, Ethereum and other larger coins have seen their values slashed and some argue that Bitcoin has no real future and may even disappear. This is where the smaller companies who are creating firms that can generate revenue and hold up to closer scrutiny see the opportunity. For too long, cryptocurrencies have had no real regulation or governance. But the new generation of crypto CEO wants this built in to the market to ease future investors nerves, while at the same time adding value to their stock. This is key to this $134bn marketplace becoming ten times that in the next ten years. Who knows, in the future, pension companies may hold the likes of Tron in the funds. But, not quite yet…

The USA is the key as, if it weighs in with cash, then regulation will ease nerves. Even Facebook is introducing its own cryptocurrency. Mind you, I’m not sure that will do anything to boost the image of crypto. Only time will tell.

Up until proper regulation, I’ve still got my money on the outsider at the four o’clock at Kempton. Otherwise known as Tron.

Jim Duffy, MBE, Create Special.