What the year 2019 will hold for the crypto?

Given how the cryptocurrency market has behaved in 2018, here are my the two popular opinions that I observe prevailing in the market. The first being the cryptocurrency is coming to its end, and the second being the best is yet to come. Although private investors have been selling off aggressively in the declining market particularly towards the end of 2018, there are several indicators which show that 2019 will be a positively eventful year for the market.

So we are asking, is this the end of crypto?

2018 saw bitcoin, the most popular cryptocurrency, lose 80% of its value from its all-time high of $20,000. From around $17,700 in January 2018, it fell to lower than $3,200 in December 2018. The overall market capitalization of crypto, which was at nearly $800 billion in January, plunged to $100 billion in December. As of January 1st, 2019, there were 934 dead altcoins and tokens according to a report by deadcoins.com.

We also witnessed cryptocurrency challengers have been writing obituaries for Bitcoin and other cryptocurrencies, claiming of them being “pure, unadulterated speculation”, “Tulipmania of the 21st century”, and the Bitcoin’s “recent precipitous drop may be the beginning of its inevitable and inexorable death spiral”. As an example, 99bitcoins.com has had 93 such Bitcoin and cryptocurrencies obituaries in 2018, where noted media personalities declared crypto to be dead, or predicted its doom.

On the contrary, people at the other side holds this opinion of the crypto market has been undergoing a correction, and it is only a matter before cryptocurrencies become a part of the mainstream economic system with their real-life use cases and gain global acceptance. Furthermore, many jurisdictions across the world are working on creating a legal framework for cryptocurrencies, there are several indicators which point towards the fact that this is not the end of cryptocurrencies, but the beginning of a new wave of digital assets.

And to the delight of those holding the optimistic perception about crypto, the day of 17th December 2018 witnessed fall of Dow Jones Industrial Average and S&P 500 by 7.6% and 7.8% respectively, the cryptocurrency market climbed upwards, with Bitcoin closing at $3545 after having opened at $3253, underlining that the crypto market is not tethered to the US stock markets. In December, which is typically seen as a positive month for financial markets, saw Dow Jones decline. The fall is being seen as an imitation of the December performance of 1931 when the world was going through the Great Depression. Bitcoin is gradually climbing upwards towards a price point of $4000, after having plunged to as low $3200 in December. Also, for the first time ever, the overall cryptocurrency markets outperformed bitcoin, adding around $30 billion to the total market capitalization.

The year 2019 — Hopeful for cryptocurrencies

On 21st December 2018, CNBC had reported that Facebook is exploring the use of cryptocurrency for global payments via Whatsapp. The company plans on using stable coin pegged to the US dollar instead of Bitcoin. The rumours about Facebook’s entry into financial services was brought about by David Markus’ joining, ex-Paypal executive. David Markus, after having worked on Facebook’s messenger app in 2014, now heads the company’s blockchain initiative.

Facebook isn’t the only tech giant gearing up to embrace blockchain and cryptocurrencies, Amazon, Walmart, IBM and JP Morgan are also testing the technology’s efficiency gains. Amazon is introducing a blockchain offering for its Amazon Web Services customers, which will enable them to launch “a scalable blockchain network with just a few clicks” that “automatically scales to meet the demands of thousands of applications running millions of transactions.” Walmart, on the other hand, has won several patents for using blockchain in the areas of healthcare, energy, logistics, food supply chain, and shipping and delivery, and it is applying for even more blockchain technology patents.

Recently, Changpeng Zhao, the CEO of Binance, also expressed his optimism about cryptocurrencies as industry players are still very confident about the future. Like many other crypto enthusiasts, he is of the opinion that the cryptocurrency market will grow because of real applications of the technology, instead of just speculative behaviour of traders.

We at Finafex believe the world’s interest in blockchain is expected to reflect positively on cryptocurrencies. It is hard to imagine blockchain technology being implemented on a global scale without cryptocurrencies. To encourage the participation of masses in blockchain-based ecosystems, it is important to include incentive mechanisms in those ecosystems, which, in this case, are cryptocurrencies. So, we can expect that governments and organisations to gradually open to the idea of cryptocurrencies since blockchain technology and cryptocurrencies go hand-in-hand.

In November, Switzerland’s principal stock exchange SIX Swiss Exchange-listed the world’s first multi-crypto-based exchange-traded product (ETP). It is expected that the US SEC will announce its decision on the VanEck/SolidX bitcoin exchange-traded fund (ETF) in February 2019. This increasing participation of institutional investors is being attributed to the relative stability of prices, high returns and better regulatory clarity around cryptocurrencies. Also, as the regulatory clarity around cryptocurrencies increases, the market can expect more cryptocurrency-related financial products in the market.

We embrace better regulatory clarity in 2019. The cryptocurrency market will bid goodbye to unregulated Initial Coin Offerings (ICOs) and welcome Security Token Offerings (STOs). This will work in the favour of investors, as security tokens will enable them to have a stake in the concerned project instead of the coins offered in ICOs, which are valuable only as utility tokens. Since projects conducting STOs will be required to comply with strict rules and regulations, the incidences of scams will also reduce.

So far, the outlook of the cryptocurrency market in 2019 is looking positive. As the market moves towards standardisation and regulation, cryptocurrencies are expected to gain wider adoption with their everyday use cases and contribute to creating more robust, transparent and equitable economies.

Norita Ja’afar

CEO Finafex

Telegram: https://t.me/noritajaafar

Finafex is an upcoming regulated, bank-backed and fiat enabled crypto asset exchange platform that offers multiple innovative features such trading of securities, bond notes, and futures. Its 24-Months Roadmap includes exciting milestones such as trade settlement, remittance engine, custodial services and trading of security tokens.

Finafex is currently hosting its pre-ICO sale, which will conclude on the 15th of January 2019. Participants of the pre-sale will receive 30% bonus tokens on their contribution. To contribute to the token sale, click here — https://ico.finafex.com/

For any queries or comments about the project, join us on Telegram — https://t.me/Finafex, or write to us at support@finafex.com