Vytautas Zabulis.

This year has been truly challenging for the crypto economy. The price of bitcoin has crashed significantly and it pushed doubtful investors into a selling spree. After a turbulent 2018, everyone is wondering what 2019 will bring. Here are some of the main trends in cryptocurrencies and the broader cryptoeconomy for the next year.

STOs will probably replace ICOs

If you’re invested in the crypto world, you certainly hear a lot that ICOs might be dead. Many people look at the whopping $11.6 billion of investments that, according to Forbes, have been raised in ICOs in 2018, and claim that ICOs are more than alive.

The truth is that the days of ICOs are numbered, given its low success rate and lack of regulation. Businesses are not running pre-ICO sales in their crypto financing anymore, that is, raising funds from private investors, institutional and venture capital. The process is shorter, tokens are sold cheaper, and they can stop the caps and extend smart contracts early.

The next thing in crypto will definitely be Security Token Offerings or STOs, as they can make securities on blockchain more transparent, transferable, and secure. They’ll be the new ICOs, as they reduce the chance of fraud and ensure at least some sort of investors’ protection.

With STOs, you can make a great investment profit. You can get fixed or flexible returns, depending on the company revenue, and you can gain non-proprietary rights. For instance, you can become included in the decision-making process of the company you invested in using STOs.

More rules will come. And it’s OK

Among an increasing number of SEC punishments stands SALT Lending, a crypto loans startup that the SEC subpoenaed in February and inspected for information regarding a $50 million ICO that SALT held in 2017.

The SEC is trying to find out whether the company’s crypto fundraising included STOs instead of ICOs. If it were STOs, SALT failed to register them as such.

The SEC also charged Zachary Coburn, founder of EtherDelta, because the platform is unlicensed and unregulated. The SEC is expected to target more companies with similar inquiries that will bring greater compliance from existing players and the ones planning on just starting their businesses.

There is also a chance that the market will seek to regulate itself before government bodies overregulate them. HODL Finance proposed an idea to establish an industry-wide association of crypto-backed loan companies in order to set rules for consumer protection and legal compliance.

Stablecoins will become more stable

The demise of USDT, or Tether, when it lost 10 percent of its value in a week, has sparked the introduction of more new stable coins. Stablecoins look promising in crypto lending, as they enable exchanging tokens at a stable rate. They minimize price volatility and include minor fluctuations, which makes getting a crypto-backed loan easier and more secure. They’re certain to become more stable.

Custody solutions will become cheaper

Custody solutions and insurance are becoming the industry standard in the world of crypto lending. Having clear regulations and providing the best way to safeguard cryptocurrency assets, they’re increasing trust and attracting new investors.

Providing investors with an opportunity to trade cryptocurrencies without the risk of theft is crucial, which is why major crypto exchanges, such as Gemini, BitGo, and Coinbase, already have their own custody offerings. As similar services spread, they will become more affordable.

Cryptocurrencies will become more mainstream

The introduction of Bitcoin futures has seen mainstream adoption, as the futures enable investors to bet against Bitcoin and settle contracts in real money, as well as trade off Bitcoin even if they don’t actually own it.

As cryptocurrencies will hit the mainstream road, we will see many more crypto-backed loans too. Such loans are an alternative to traditional loans that enable people to get a fast, cheap cryptocurrency-backed loan without credit checks, while enabling investors to make a profit for their coins in the future.

Security will be a prime source of innovation

Blockchain enables secure transactions and prevents fraud, which is why it’s constantly inspiring new applications. Security remains the primary concern in the crypto economy, thus it will be the primary source of innovation in the industry. Greater security will bring greater stability.

Companies such as HYPR use decentralized biometric blockchain authentication and other blockchain-based applications to provide greater security and minimize data breaches. There are more businesses moving in a similar direction.

Yes, 2018 has definitely brought a lot of changes in the world of cryptocurrencies. One thing is certain: if all of these trends become a big deal, they will have an accumulative effect and will yield something investors so desperately await – greater stability. Stability normally means confidence which fetches price stabilization. It would be naive to expect bitcoin trading around $20,000 bar anytime soon but the losses of 2018 will probably soon be forgotten.

HODL Finance is the European digital lending company. HODL Finance issues loans backed by cryptocurrency and other digital assets. Founded by the shareholders of the peer-to-peer lending platform, Savy, HODL Finance now serves clients around the world.