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Kaspersky Labs Report: Excessive Blockchain Hype to Disappear in 2019

Kaspersky Labs has released its latest report on the state of the cryptocurrency sector. Digital assets and their infrastructure contain a unique mix of technological and financial risks, which Kaspersky regularly tracks.

But this time, the report makes a few future predictions. In 2019, the drive for blockchain applications would abate, as businesses realize blockchain has limited applications beyond the creation of cryptocurrencies.

“The reliable application of blockchain beyond cryptocurrency has been explored and experimented with for years, but there is little evidence of achievement. We expect 2019 to be the year people stop trying,” stated the report.

Additionally, digital assets may also see dropping usage as the payment use case unwinds. Problems with high network fees, as well as the inherent price volatility, made merchants give up on carrying crypto assets as a payment option.

But the most pessimistic prediction of Kaspersky is that the valuations of late 2017 and early 2018 will probably never return, leaving both Bitcoin and altcoins to hover at much lower prices.

“We believe there is a finite audience for whom cryptocurrencies are of interest, and once that limit is reached the price will not rise further,” commented Kaspersky Labs.

The prediction followed another day of selling, where digital assets lost between 10 and 20% once again on a rapid sell-off. For about two weeks now, these mass selling events have repeated, dragging down Bitcoin (BTC) well below $4,000, with expectations of a breakdown under $3,000.

After a prolonged price stagnation, a series of crashes in November brought prices down to levels not seen since before the rallies. Additionally, other elements of the crypto infrastructure show a withdrawal of investors. Mining slowed down for Bitcoin and some of the major coins, and Ethereum fell out of favor due to the low adoption of distributed apps.

Still, a few new models for digital assets established themselves in 2018, mostly relying on Delegated Proof-of-Stake (DPoS). But even the successful projects have fallen significantly since their peak prices.

The entire cryptocurrency market’s valuation has dropped to $121.2 billion, down from peaks above $795 billion reached in January 2018. The massive spike in prices is now seen in hindsight as a bubble that may not repeat, as the crash renewed skepticism for the markets.

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