Results of 2018 and TOP-9 trends of 2019 for the cryptocurrency industry
Bitcoin is already ten years old, and it seems he has come a long and thorny path.
Bitcoin technology called “blockchain”, which is best suited for finance and is used in cryptocurrencies, has given a strong challenge to the banking system, which currently controls the entire global economy. Pursuing only their vested interests, the banks themselves decide who, when and on what occasion should be financed in sufficient quantities, and who can be left behind. In addition, central banks issue additional money when it pleases them, because of which the money depreciates and their purchasing power becomes weak.
Now it becomes clear that the blockchain technology and cryptocurrencies are able to transparently distribute money so that extra money issues can not occur, so that the money supply remains fixed, and so that a small group of people in power cannot freely manipulate the economy.
It seems that such a challenge to the current state of affairs does not like the current "owners" of the system. Everyone wants technological progress, but no one wants to part with his piece of cake, and this becomes the main obstacle to the adoption of cryptocurrency by traditional financial institutions. It is possible that this contradiction contributed to the “bearish trend” in the cryptoindustry in 2018.
During the 2017 bull rally, some cryptocurrency projects apparently were indeed overvalued, and the prices of many coins were above reasonable limits. And it became a “trap” for many investors who purchased cryptocurrencies for the purpose of making profit in fiat money.
Of course, the downward trend of 2018 came as a shock for many investors, who got a bitter lesson. The word BUIDL is now in vogue as a variant of the term HODL , and it means “to do something useful for the growth and development of the blockchain ecosystem”.
First of all, we will talk about promising trends in 2019, let's recall the trends we were guided by in 2018. And also look at the reality that faced in life.
What brought the year 2018 – sum up
Probably, none of us was ready for such an intense “bearish” market, and now it is interesting to look back and see what we expected from the crypto market in 2018.
In 2018, we saw the launch of platforms that became real competitors of etherium (ETH) . TRON and EOS knew about the launch, and the forecasts said that in 2018 dapp would not be able to claim any significant success, that some of the new projects would fail, and that the main projects would continue to develop in the right direction.
However, for many it came as a surprise that many dapp projects began to move from ethereum to new blockchain networks in order to continue development.
Forecasts for 2018 indicated that the ethereum would dominate as a platform for dapp, that regulators would oppose ICO projects , since 70% of all ICOs were based on ethereum (which then led to a jump in the price of broadcast).
Everyone thought that “ICO madness” would continue, and at the beginning of the year everything looked exactly like that. However, the ICO tendency weakened, especially in the second half of the year, when regulators in many countries tightly set about regulating these projects. Their rules were aimed at protecting investors from fraudsters, but they complicated the lives of many cryptocurrency projects.
We also predicted the growth of ICO on other platforms, and also talked about other ways to raise funds (for example, about pre-ICO).
The question of cryptocurrency scalability until the end of 2017 was still open, as the peak of prices and the increase in the number of transactions showed that blockchain networks barely cope with transaction volumes. Therefore, there were predictions that discussions about scalability in 2018 would still be relevant.
Questions have arisen about whether cryptocurrency projects are capable of ensuring what they claim to be – to become a means of moving money around the world. Many supporters of Bitcoin with great hope looked at the development of the network Lightning Network , and, fortunately, their hopes were met. Other blockchains, eg ethereum, are also working on solutions that significantly speed up their transactions.
The forecast that 2018 will be the year of investment tokens did not work, since the launch of projects in accordance with the requirements of regulators turned out to be a much longer process.
Instead, the stablockcoins were in the spotlight , as people tend to cryptocurrency with a stable value.
Availability of digital assets
We all hoped that the purchase of digital assets in 2018 would be much easier.
This really happened during 2018, thanks to platforms like Cashapp that allow people to buy bitcoins. And even the “conservative” crypto-exchange of Coinbase has added such coins as 0x and BAT to its listing and plans to continue this list.
In addition, some institutional investors entered the over-the-counter market, and many derivative products appeared (for example, bitcoin futures ).
Top 9 trends cryptocurrency industry in 2019
In general, the cryptocurrency market in 2018 was slow.
Bitcoin, which is known for its considerable volatility, during 2018 also showed periods of lethargy, when the price remained almost unchanged for 12 hours or more.
The widespread acceptance and acceptance of Bitcoin was significantly hampered by the fact that many people suffered serious losses in this market.
It is hardly possible to call the exact cause of the latest “bearish tendency” – as well as indicate why this market can recover now.
However, now is the time to think about trends in 2019, which should be taken into account in your future investment strategy.
Trend number 1: weakened trading
In general, cryptocurrency trading has already suffered from the bear market of 2018, when many have lost a significant amount of money. Some traders kept their profits in bitcoins, completely forgetting that cryptocurrencies are subject to significant volatility and cost reduction. Therefore, many of them have only a portion of those investments and profits that were at the beginning.
In addition, many of those who turned cryptocurrencies into fiat money had to pay taxes on profits, and this made them wonder why it was worth investing at all.
It was a strong blow to the cryptocurrency trading, but not its end. Many made the appropriate conclusions, and left the trading, and many continued to trade, becoming wiser from the volatile prices in the market.
This state of affairs contributes to fierce competition between cryptocurrency exchanges , as they seek to capture a significant part of the market.
In 2019, trading volumes on crypto-fiat exchanges may experience growth, while “pure cryptocurrency” exchanges are likely to experience a decline in volumes.
If, in 2019, institutional investors start trading in cryptocurrencies, they are unlikely to want to keep their profits in cryptocurrencies.
It is also highly unlikely that institutional investors will invest in coins that are not directly traded with cryptocurrencies.
Trend # 2: Low Volatility
The high volatility of Bitcoin in 2017 affected the entire cryptoindustry.
However, in 2018 bitcoin volatility was lower. There were moments when sharp changes in prices occurred within 24 hours, although this did not happen so often.
It is possible that the trend will continue in 2019, and we will probably see more price stability in the crypto world than in previous years. And this is something that institutional investors may like, because they feel more confident with a steady increase in prices than with their fluctuations. Stability will also contribute to the widespread acceptance of cryptocurrencies and the growth of this industry.
Trend number 3: the arrival of institutional investors
Institutional investors are cautious, and they are more eager not to lose than earn. Most of them show due diligence and approach to investing very carefully.
Here's how Anthony Pompiano, CEO of Morgan Creek, said on Twitter:
6 / Crypto investors ask “how much can we make ??” & insitutional investors ask “how much can we lose ??”
It is also a risk that the institutional managers will not take any risk. Can lose job if lose $$ tho.
This is an important distinction
– Pomp 🌪 (@APompliano) June 16, 2018
“Most of the useful tokens do not bring guaranteed income, and banks do not accept them. If there is no experience with them, if they cannot be regulated by law, if there is no risk control, etc. Also, many do not have the opportunity to conduct legal due diligence, as the size of some funds is not too large (up to $ 50-100 million).
If cryptocurrency investors ask “how much can we earn?”, It is more interesting for institutional investors to know “how much can you lose on this?” Besides, institutional managers, because of their obligations, do not fully profit and have less reason to risk ]. They risk work if they lose the dollars of their customers, and this is an important distinction between them and private investors. ”
It will probably take years before the institutional money fully enters the cryptocurrency market, although we hope for some significant impetus in 2019, for example, with the advent of Bitcoin futures from Bakkt .
Much is already being done to ensure that institutional investors can enter this market, and there are certain positive developments. Financial companies come up with various products related to Bitcoin and other cryptocurrencies, so that institutions can easily invest. Apparently, it is worth hoping that such investors no-no, and will make short deals in this market, and not think that they will come in a crowd, and then a miracle will happen.
Trend number 4: news background will not have a strong impact on the market
News about cryptocurrency and trading have become a profitable enterprise. The market reacts whenever big events or news come up.
Usually, if good news is distributed, then sly investors buy certain assets, and when the news goes out of fashion, they sell them off. With bad news, the goal is to sell earlier and more expensively, and then you can buy the same assets when the price reaches a certain minimum (bottom).
It is possible that such a trend in 2019 will not end completely, but it may sharply decline, since many traders have already burned themselves and do not want to repeat this path.
Trend # 5: there will be no massive "bullish" rally
The market has not yet recovered from the bear market. Bitcoin already had support levels at $ 12,000, $ 9000, $ 6,500, $ 5,000, $ 4,000, $ 3,500, and they were all punched. Many have underestimated how low Bitcoin costs can be.
The bear market will end when the price rises and does not want to decline.
They also say on Wall Street that the bull race after the bear market is gaining momentum gradually – “the bear jumps out of the window, and the bull climbs the stairs.” This means that bear markets come suddenly, while bullish rallies may not turn as fast as many would like.
It should be noted that the largest rally of bitcoins and cryptocurrencies was preceded by years.
However, small rallies should take place during 2019. This may be the result of the approval of a bitcoin ETF or other bullish news, or they may become completely spontaneous.
Trend # 6: capitulation of a number of cryptocurrency projects
The number of news about cryptocurrency projects that have decided to admit their defeat in the competition is growing.
Recently, the Basecoin project decided to stop its activities and promised to return the money to investors. This was due to the requirements of regulators, as the coin would most likely be classified as a security. This is just one example of a new project that failed, and apparently it will not be the last.
It should be noted that many projects began ambitiously, but without taking into account the conditions of reality, and the current market simply suffocates them. It is possible that many will leave the market before the reversal from the “bearish” trend to the “bullish” one. Some of them, which are already traded on the stock exchanges, are unlikely to make much progress in 2019 because of the harm done to them.
Many projects simply do not have the means, and they often do not cope with the increased demands from regulators, who also strive to classify them as securities.
It is important to note that some projects are funded by venture capitalists who are seeking funds to help some projects stay afloat.
Trend number 7: the relevance of scalability
Today's cryptocurrencies are still trying to solve the problem of scalability, since the speed of transactions does not allow them to compete with the centralized money transfer business.
For example, the ethereum is still running at a rate of 15 transactions per second, and it is unlikely that it will be fully scaled in 2019, although a clear plan and scaling terms have already been defined based on sharding and the Casper protocol . In addition, in 2019, the Lightning network for Bitcoin can be fully implemented.
(It is possible that some additional year of time would be very useful for platforms with dapp so that they can find good solutions for scaling).
Trend number 8: the creation of state cryptocurrency
Many governments already see the need to create a strong legal and regulatory framework for cryptocurrencies, which indicates some maturity of this industry.
However, some governments also seek to follow the path of creating national cryptocurrencies. For example, Venezuela has already released its own cryptocurrency Petro , which, they say, is supported by oil.
It is possible that in 2019 there will be few such currencies, but serious efforts in this direction may cause a “bullish” growth in the cryptocurrency market, as this would increase the number of people involved in crypto.
Trend # 9: Growth of Investment Tokens
As soon as legislators and regulators clearly designate their position, cryptospace will become more favorable for launching investment tokens .
While investment tokens are not in a hurry to gain momentum due to the uncertainties of the rules for their regulation. Studies show that STO is an optimal fundraising model than legacy ICOs. And as soon as the rules of the game become clear, this may cause a sharp increase in investment tokens in 2019.
Investment tokens are by their nature also the most favorable for cryptoinvestors, since their acquisition means a real stake in the company that sells these tokens. They differ from traditional tokens, which represent a form of currency or carry some utility function, but are not supported by any shares in the company that produces them.
One of the growth aspects of investment tokens is related to blockchain platform competition. Some investment tokens can be created on their own platforms, while many can use existing blockchains. However, it is too early to talk about which platforms will prove to be the winners.
It seems that the 2019th year will be exciting, and it will focus on the construction and development of the cryptoindustry. It is also possible that this will be an attempt to return that hyip and level of appreciation that this market enjoyed at its peak in 2017.
In any case, there is a high probability that at the end of 2019 we will be at a higher price level compared to the beginning of the year. Although, the price difference may turn out to be small, and returning to historical highs may take a long period.
Also, at least one unexpected trend appears in the cryptoindustry every year, and the 2019th is unlikely to be an exception. Perhaps this is an aspect of crypto that is not paid attention, or, this is something that does not yet exist. It is also possible that this will be associated with mining , exchange functions, the classification of coins, options for using blockchain platforms, types of dapp or adoption of cryptocurrencies.
In any case, this market will not be bored – if only because, apart from our forecasts, it has its own logic and reason. And therefore, 2019 requires cautious optimism, which is best combined with our own research.
Share your opinion on this issue in the comments below.