CRYPTOCURRENCIES may be facing a prolonged bear market. Companies that issued tokens, or digital currencies, over the last two years through initial coin offerings [ICOs] may have to sell more of these assets to finance their operations.

There's just one problem. There are very few takers.

After the blockbuster success of ICOs in 2017, with funds raised at more than $6 billion, cryptocurrencies nosedived, wiping out about 85 percent of their total market value since hitting a peak of more than $800 billion in early 2018.

Bitcoin, the original cryptocurrency, has dropped more than 80 percent since hitting an all-time high of nearly $20,000 in December 2017.

A global regulatory authority led by the US Securities Exchange Commission has created fear about greater oversight and acceptance of the currencies for payments among the companies issuing the tokens and the investors that bought them, taking the wind out of the once red-hot digital assets.

Data from Dead Coins, which tracks crypto startups, showed that around 1,000 of these companies either failed in the last year or their projects have now been abandoned.

For digital currencies still in the market, the prospect of incoming supply some with a probe terminal schedule - could pose a challenge to their businesses given the current downturn in the market

''Most people don't fully understand the impact of the new supply on this market particularly when   there's low liquidity,'' said Ryan Selkis, co-founder of .Messari, a crypto data platform in New York.

''I don't think anyone has any idea how much hidden inflation  there is in the form of token reserves that are going to be unwound gradually.''

The honor and serving of the latest global operational research on cryptos and markets continues. [Agencies]


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