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Yesterday, ETCDEV announced that they were closing due to lack of funds. The team tweeted that,
"Unfortunately ETCDEV can not continue working in the current situation and has to announce the arrest of our current activities."
The arrest follows the collapse of cryptographic prices that significantly devalued cryptography prices, pushing Ethereum Classic (ETC) from nearly $ 50 to just over $ 4 at the time of writing. However, ETCDEV made it clear that this does not mean that Ethereum Classic (ETC) is dead. This is because there are other teams working on ETC.
For example, IOHK, the company led by Charles Hoskinson, also works on ETC. There is also ETC Labs, which is pushing a lot to carry on Dapps in the ETC ecosystem. Through the ETC laboratories, in 2019 12 new startups will be created on the ETC blockchain. Of course, ETC is here to stay. However, this closure of the ETCDEV due to the market crash leads to a fundamental question: how efficient is the market price of cryptocurrencies?
In an efficient market, the financial problems of the ETCDEV would have seen a huge drop in prices. However, this news only led to a slight drop in the price of ETCs. In reality, the dive is not as unlike other cryptos. In fact, the decline can be attributed to the decline in Bitcoin prices and not so much to that of ETC. It is likely that if the bitcoins were to meet today, even ETC will most likely also meet. This is a highly inefficient pricing mechanism that presents a systemic risk to the entire market for two reasons.
Firstly, if a truly decentralized blockchain like ETC is at risk of losing developers due to financial constraints, how many tokens are under duress in this market, but are they supported only by Bitcoin (BTC) and by speculation? There are many tokens in this market that have nothing going on. Many of them do not even have transactions on their networks and their value is not based on any form of adoption or realistic potential for it. This means that many investors hold useless tokens and once the domains start to fall, many of them could go to zero.
Secondly, because the reality of a large portion of the potentially useless market begins to sink, it could trigger panic selling. This could have the potential to potentially damage the credibility of the entire market.
With potentially harmful scenarios, a number of potential results await the encrypted market. One of these is an increase in bitcoin maximalism. If the prevailing sentiment indicates that most of the cryptos are risky, the money could flow into bitcoin (BTC) as the only safe bet. This could see the market consolidate around BTC and kill a huge part of the market.
This scenario is made plausible by the greater institutional interest in Bitcoin (BTC). It is also made plausible by the fact that second-tier bitcoin solutions make Bitcoin highly efficient in doing what most of the altcoins can do. There is also the possibility that the market can consolidate around a few highly efficient scrambles that are extremely good at what they are designed to do.
Whatever scenario is present, one thing is clear, there may not be a real need for over 2000 cryptocurrencies in the future. Many of them can not justify their evaluations on the market and they will disappear over time.
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