Crypto coin market listings need to separate cryptocurrencies into market segments to encourage decoupling them from current stranglehold of Bitcoin price synchronised control
The article ‘ Bitcoin reaches record high correlation to S&P 500 ’ by Zack Voel (https://www.coindesk.com/bitcoin-reaches-record-high-correlation-to-sp-500) confirms how the Institutional Investors using both volumes and Futures/Options Trading tools are forcefully imposing their traditional fiat financial markets “controls” over the direction of the cryptocurrencies valuation and thereby how the public values the associated Projects. This is most undesirable for such a young industry. The cruel destruction from the dotcom bust should remind us not to ignore this issue.
It seems that this control will continue to spread as Futures/Options Trading expands to Altcoins that become dominant, such as is occurring with Ethereum.
Some might argue that it is a good thing because of the relative stability and validation it gives to the crypto-ecosystem among the currently sceptical global fiat-based community, especially those governments that still view many of these cryptocurrencies and related Projects as scams.
Significant downsides for genuinely valuable Projects are magnified
The significant downsides for many crypto Projects is the implicit introduction of a lack of objectivity in the evaluation of each specific project on their merit. The currently, frustrating, synchronised price movements driven, exclusively, by Bitcoin due to its market share will also now be used to control the implied valuation of all Altcoins, irrespective of their quality or whether they are a scam or not.
This sychronisation and control by a single crypto, Bitcoin, is very detrimental to all quality projects, and requires some innovative solutions by the crypto community to decouple all the cryptocurrencies from each other, except where there is commonality among a group of cryptocurrencies around their specific projects e.g., Payments products, Product origin process authentication, Logistics, or by sector such as Agribusiness, Lending, Manufacturing, Real Estate, etc.
In the fiat-based ecosystem, the share prices of stocks are evaluated according to their industry sectors. This has significant benefits to protect those sectors that are doing well from those that are in decline. A great example at this at the present time during COVID19, is the price of Technology Stocks are soaring while other sectors have cratered or are struggling to recover. This is a true reflection of the commercial reality of each of the sectors.
This same logic should be applied to the crypto-ecosystem so that all investors as well as Governments can have objective means of evaluating what the quality of the product offerings are by market sector, and not simply lump all crypto Projects as defined by one or a select group of Projects that “shout” the most in the media. Currently, some of these Projects have had spectacular failures which has then been directly than assigned to all crypto Projects. This needs to be addressed, urgently, as more money is being poured into the industry and the increasing attention from Regulators should not be driven by fear of the Industry, but rather by a need to support and strength it.
My Suggestion: Sector segmentation in the listing on the crypto market listings
The existing crypto market listing should have market sector sub-headings . This would encourage Investors to then seek to understanding more about the market sector the cryptos are targeting and how they are meeting the needs of that sector. It would also enable Investors to make differentiate investment decisions on the amount of investment in the cryptocurrency, irrespective if another cryptocurrency is falling in price due to the downturn of the sector they are in.
It would be straightforward for the average investor to apply their existing analytics used in evaluating different industries to make appropriate investments, while at the same time providing stability and growth to those crypto Projects that have clear pathways for growth and development.
Below is an example of my proposed possible layout based on the existing format in coinmarketcap.com
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