Why it is the time for crypto and blockchain
For investors and entrepreneurs interested in cryptocurrency and blockchain, right now could be the best time to jump.
Around two or three years ago, I remember the most popular topic of conversation among investors and entrepreneurs was cryptocurrency. We all watched while Bitcoin soared in value, and the market expanded exponentially.
Since Bitcoin arrived in 2009, the cryptocurrency industry exploded, with the inevitable side growth of the crypto-trading sector. And in 2017/2018, to some, it seemed unstoppable. Everybody wanted to invest in crypto, and those that weren’t investing, were launching Initial Coin Offerings (ICO) to raise funds for the next big idea.
Ups and downs of the blockchain and cryptocurrency sector
When Bitcoin hit $20,000 in value, some started to talk about the possibility that crypto was a fad and the bubble would soon burst. There were signs that a decline was on the way, and in 2017/2018, 80% of Bitcoin’s value was wiped. Regulators came down harder on ICOs, and suddenly the sector was vilified in the press.
But, as a seasoned venture capitalist, I know that these kinds of ups and downs are inevitable in a new trading sector. And what interests many investors now, more than cryptocurrency itself, is the blockchain technology it’s built on.
We’re seeing Bitcoin’s value back at around $12,000 right now, and the sector is once again full of optimism and new platforms. Which is why now is the time to get involved.
Renewed entrepreneurial focus
I’ve recently seen much more focus from entrepreneurs and start-ups in the blockchain and crypto space than I have in years. It’s interesting to note that start-ups are presenting tried and tested solutions to real-life problems, rather than simply fundraising on the back of an idea and a white paper.
If you are considering investing in blockchain, or you’re developing an idea for a start-up, here are a couple of factors you should think about before taking the plunge.
As an investor, you should seek opportunities that can show you tangible results. For example, invest in a start-up that can demonstrate a product, and that brings customers along with them. In return, be prepared to take a long-term view and provide more than financial backing.
Look for more than funding from your backers
As a start-up seeking funding, be prepared to demonstrate your product or service to potential investors. Explain why your platform solves a real-world problem for customers. Bear in mind, the blockchain tech itself is no longer the main draw. We know that’s what will be powering your product already. Our interest as investors lies in how you’re using this tech to create a product that customers need.
The right type of investment at the early stages of your start-up can be invaluable. While money is always important, be prepared to compromise on funding in exchange for advice, help and key introductions. These can pay off hugely in the longer term.
Finally, make sure you choose to work with people, whether they are colleagues, investors or mentors, that truly understand the huge potential blockchain and cryptocurrency has. We could see this tech completely change the global economy in the not-too-distant future. It could feasibly change the way countries trade, and how financial systems are managed. Its potential can’t be underestimated.