The cryptocurrency market is undergoing a major paradigm shift as low-quality altcoins embark on a mass extinction event, according to Xapo President Ted Rogers.This view, which is shared by industry titans like Vitalik Buterin, suggests things will get a lot worse before they get better.
“We could be in the midst of the extinction-level event for “cryptoassets” that many maximalists have predicted. 90%+ of CoinMarketCap list will disappear eventually – might as well happen now. Meantime, lower BTC price means incredible opportunity to buy more bitcoin,” he said.
Rogers’ tweet echoes previous comments by Ethereum founder Vitalik Buterin, who believes that 90% of tokens listed on CoinMarketCap will go to zero. Buterin made the comments back in October during the historic run-up in cryptocurrency prices.
Whereas Buterin emphasized the emergence of higher quality coin offerings following a mass-scale correction, Rogers believes now is the ideal time to buy more bitcoin. The leading digital currency continues to cannibalize altcoins with its share of the total market crossing 54% on Tuesday.
At the time of writing, there were 1,833 cryptocurrencies listed on CoinMarketCap. A couple hundred were added to the website’s tracker in the last few weeks.
Crypto assets have shed roughly $220 billion over the past three months and are trading at less than a quarter of their all-time highs. Although the recent meltdown originated last Tuesday when the SEC communicated its non-decision on the VanEck SolidX Bitcoin ETF, the extent of the selloff suggests there are other factors in play.
With the bulk of the declines concentrated in altcoins and tokens, many are blaming the latest rout on a large-scale cashout of initial coin offerings (ICOs). This has direct implications on Ethereum, which is one of the most important bellwethers of the ICO market.
The ether price has experienced an unprecedented drop over the past seven days, losing more than a third of its value to trade at its lowest level in 14 months. Previously, the developer’s cryptocurrency had shown resilience in the face of broader market moves.
Although the path forward is paved with uncertainty, a structural shift in the ICO market will ultimately benefit cryptocurrencies. As Buterin said last October, “there are some good ideas, there are a lot of very bad ideas, and there’s a lot of very, very bad ideas, and quite a few scams as well.” Cleaning up this image is a good thing even with the accompanying pain it has produced.