2019 Cryptocurrency Investment Guide: Top Bitcoin And Blockchain Industry Trends For the Future
Cryptocurrency Trends For The Future
Celebrating a decade, the Bitcoin whitepaper has certainly ushered in a revolution that many have been hoping succeeds. The blockchain is certainly a future tech that is challenging the homogeneity of central banks and many other financial institutions.
Cryptocurrencies are now trying to replace this centralized model with a more transparent distribution form where money has a fixed supply. Thus, it will make systemic manipulation much harder. While this is a great concept, implementation has been notoriously hard. After all, if the cost of technological advancement is power, those at the top would naturally prefer the latter.
Many skeptics blame this as the cause of the slow embracement of cryptos and go as far as to point fingers at these institutes for engineering the current downtrend. While this might be a wild accusation, it certainly helps the current financial setup.
There is no doubt that the excesses of the market at the end of last year meant that the valuations of many crypto assets were grossly bloated. Yet, its bigger problem was the price bubble that was engineered by people who were looking at a quick profit from this venture.
While the speculation will go on, the hard truth is that cryptos have lost over 80 percent of their value. People who have kept the faith have learned more about this fledgling industry, with “buidl” which means to build and grow the blockchain ecosystem, being the new operative word.
Learning From The Remarkable Year That Was 2018
At the start of the year, many expected the industry to explode, not implode. This year has certainly kept things interesting:
DApps success: Many expected DApps to slowly get into the market before they could succeed. However, Tron made some exciting gains and has convinced many devs to jump ships.
End of ICOs: With a bull run, there was a craze for ICOs that only cooled off after the mid-year mark. Governments around the world implemented regulation to curb the ubiquitous scamsters but they also made it harder for regular projects to get off the ground.
Scalability issues: As soon as Bitcoin [BTC] gained traction, the scalability conundrum needed to be addressed. This was duly done so by the Lightning Network [LN], with other cryptos working on similar solutions.
Ease of transaction: Multiple platforms such as Cashapp and exchanges such as Coinbase are making it easier for investors to purchase bitcoin and other altcoins.
Trends To Look Out For In 2019
2018 was a roller coaster year with the price of Bitcoin, the flagship coin, getting restless after at most a day of slow movements. The sharp downtrend has been blamed on a host of factors. Still, there is no clear cause and as such no magic solution to get the industry back on track.
Yet it might be handy to keep some things in mind:
Crypto trading trend: The year was like being in the wild west for traders. However, when the dust settled, those who had made a tidy profit had kept those gains in Bitcoin, a crypto that was not immune to the market forces. Those who cashed out too were heavily taxed on “capital gains”.
With prices now much closer to their predicted values (estimated at $1600 to $2000) this sort of trading trends will recede and while trading will continue it will be carried out when absolutely necessary. Thus crypto-to-fiat and vice versa exchanges should become more common than crypto-to-crypto exchanges.
Finally, institutional investors will play a greater role once the prices stabilize. This will inject much-needed life into the market but will be limited to coins that have direct fiat trade nodes.
Less price fluctuation: As the industry matures it will undoubtedly settle down. This year was marked by the extreme volatility of Bitcoin prices, which led the whole industry into the tempest.
Barring a sharp drop in November prices had been rather steady for most of the latter half of the year. This tread looks likely to continue as it is in the best interest of the coins and the investors. In fact, stability will undoubtedly attract big institutional investors which would then have an impact of solidifying those gains.
The advent of institutional investment: Any industry needs funding to be viable. While cryptos had a total market cap of over $700 billion at its peak, this was without the money from Institutional investors. As the CEO of Morgan Creek, Anthony Pompliano, explained ” Crypto investors ask ‘how much can we make??' & institutional investors ask ‘how much can we lose??'”
He went on to raise the most important concern for such investors stating “Majority of the utility token funds in the space aren’t bankable by institutions. No experience, no compliance depts, no risk controls, etc.Can’t pass due diligence & fund sizes too small (some institutions write $50-100M min check size).”
While it might be a while before institutions are comfortable, 2019, will introduce Bakkt Bitcoin Futures. This is hoped to be the gateway for institutional investors and different financial products are being developed to cater to this segment.
Market stability: This year has seen many price fluctuations, some based off a rumor. Traders have sold and bought digital assets based on this news. However, the news might not be as big a factor in the new year as it was.
This is primarily down to the fact that speculative traders have already lost too much in the last couple of months. Seasoned traders still with crypto will be slower to trust and trade based on rumors. Inexperienced traders are unlikely to join or make major plays. All these factors will help the market stabilize.
No massive bull market: When the bull run ended and the markets slowed, the prices began to fall. Many expected prices to stop around the $12,000. Soon support levels of $9k, $5k and then even $3.5k were being broken. While the prices have been hovering around the $4000, the market continues to be in the grips of a bear market.
The coming year is expected to begin the recovery process, though, no miraculous bull run a la December 2017 should be expected.
Multiple project shutdowns: 2019 is expected to be the year where many crypto projects will shut down, owing to stricter legislation or lack of funds. When many projects were initiated with rose-tinted sunglasses, during the peak of cryptos, they did not factor in the prolonged bear market sentiment. Although this will also be a blessing as it will act like natural selection and only ones with sound design and proper business plans will come out of this.
The scalability issue: While LN has done well in addressing BTC issues with scalability. speeds and concurrent transactions are still an issue. Ethereum, for example, is working on the Casper Protocol to remedy this. However, cryptos are likely to need more time to figure out a concrete solution to this problem.
Support for national cryptocurrency: Countries are fast adopting a regulatory framework for cryptos. Nations such as Russia and Venezuela are pretty keen to launch and adopt a state cryptocurrency, While this has an outside chance, if it does come to pass, it will no doubt trigger a bull run.
More security tokens: With a better regulatory framework, interest in this sector will surely blossom. Another reason would be the fact that unlike traditional tokens, where tokens are currency and are not backed by any stake in the issuing company. these tokens are.
A new year should always bring with it renewed vigor and hope. 2019 should do the same for the crypto sphere. The emphasis will unquestionably be on finding means to rebuild the industry and help it get back on its feet first, then earn back the valuation it enjoyed at the beginning of this year.
This is easier said than done. Yet, after all the market fluctuations 2019 should usher in more stability and thus incrementally improve the valuation of the crypto market. While no one is expecting the prices to hit the highs of December 2017, there could always be a few surprises. Changes to the mining process or unique use of the blockchain platforms, anything that triggers wider adoption will be useful
In any case, whether the new year is interesting or depressing, only time will tell.