SWOT Analysis on the Crypto-Currency market - Part 1 - Strengths

In recent months there has been an explosion in the price of cryptocurrencies. Mainstream media has finally started some coverage of the market especially the Bitcoin. Now people of all ages have at least heard of the Bitcoin after its consistently set record high after record high over the last few months. But for the majority of world that's the extent of their knowledge, little understanding how crypto-currencies work such as mining as well as the wealth of Cryptos on the market.

Strengths:

Crypto-currencies are new investment opportunities in a rapidly developing market. As the market matures more and more currencies will start to pop up and create an 'ecosystem'. This means rapid growth and new Cryptos emerging with a multitude of uses. Steem is a great example of the diversification of the crypto market.

Where bitcoin is digital gold and has little use other than for black market dealings, sites such as Steem create their own traffic and are steadily growing. This is a very sustainable business model and as more people start to use Steem the currency will only increase in value due to the basic economic principles so supply and demand curves. A finite supply combined with a growing demand means steady price growth.

Following on to this principle it can be applied to the market as a whole. The more people aware and using crypto-currencies the higher the demand only forcing the price upwards. This can be seen in reverse with the price of the Bitcoin after exit scams. Falling supply and sustained demand can only increase price even if it is bad news. Bitcoin fell from around $2.4k to $1.9k in the after the last exit scam. The initial bad news scared some people into selling boosting the supply lowering the price. However, ever since due to aggregate supply falling the price of the Bitcoin is now $4.6k nearly double what it initially was before the exit scam and this all happened over the last two months.

The lack of regulation and centralisation means the market is purely down to market forces with little human intervention. This is why we have seen such magnified price changes within the Crypto-market, the likes of which will never be seen on the regulated stock exchange For example Etherium's unprecedented 4000% increase in the last 7 month. This is just one example but the list is an exhaustive one.

Thanks for reading.

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Sky Shorts Financial

Coming soon:

Part 2 - Weaknesses
Part 3 - Opportunities
Part 4 - Threats

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