Crypto Analyst Arjun Balaji Proposes 63 Crypto Asset Theses for 2019


After having a very negative 2018 in terms of price action for Bitcoin (BTC) and other virtual currencies, analysts are starting to think about 2019 and what it can bring to the crypto space. This is what Arjun Balaji, The Block technical advisor did in a blog post published a few days ago.

In this article, he proposes theses about what will happen in the virtual currency market. The main topics touched are related to Bitcoin, Ethereum (ETH), other virtual currencies, stablecoins, cryptocurrency funds, crypto companies, regulations and more.

The first thing he mentions is that he sees the Lightning Network growth continuing into 2019. At the same time, he says that by the end of 2019 the number of Lightning nodes with channels will be more than 10,000 when currently they are close to 2,100. Additionally, he thinks that the network capacity will move from the current $2 million up to $25 million.

He thinks that the increase in the number of channels will happen with 60% confidence and the network capacity will also happen with 75% confidence.

The Lightning Network (LN) is the most important scaling solution for Bitcoin that developers are currently working on. It will allow the Bitcoin network to be less congested and work in a better way. Additionally, users will be able to process micropayments through the LN.

Arjun is 50% confident that at least one major exchange will launch an LN hub for users during 2019. Furthermore, he believes that a working implementation of Schnorr signatures will be implemented on Bitcoin via a soft fork by the end of 2019 with more than 5% of node adoption. He is 75% confident that this will happen.

About the Ethereum network, he believes that Augur (REP) is going to have a breaking dApp in 2019 that will allow it to move from $1.5-2 million notional at stake to more than $10 million. He is 70% confident about this. He believes that this can happen because of an improved UX/choice of clients, increased brand awareness and demand in the market for a non-custodial prediction market, among other things.

He is 60% confident that there will be a major pushback from disenfranchised ETH miners that might propose a contentious hard-fork. Miners on the Ethereum network are being discouraged in order to transition Ethereum into a Proof-of-Stake (PoS) consensus algorithm. On January 16, Ethereum is going to experience a hard fork that will reduce mining rewards from 3 ETH down to 2 ETH.

Arjun Balaji thinks that Grin and BEAM implementations are going to be launched during the first quarter of 2019. Although both of them have different proposals, he is 75% confident that Grin will be seizing the lion’s share of market interest in Mimblewimble.

Due to the different comments provided by ZookoWilcox about PoS and the ZCash Founder’s Reward, Arjun believes that the ZCash Foundation is planning a multi-year transition to move to a PoW/PoS system (50% confidence). Regarding founders’ rewards, he is 30% confident that they will be changing.

About XRP Arjun gave a very negative comment. He is 80% confident that Ripple Labs, Inc. will receive a fine for selling an unregistered security. The XRP community has been discussing whether XRP is considered a security or not and which is the influence that a negative decision of regulatory agencies would have in the crypto market.

He has also talked about Bitcoin hard forks such as Bitcoin Gold (BTG), Bitcoin Diamond (BCD) and Bitcoin Private (BTCP). He is also 70% confident that these coins will not be traded among the top 25 as they currently are.

For 2019, he expects Tether’s dominance to drop under 50% with 75% confidence. Back in 2018, several new stablecoins were launched to the market trying to get an important share of the market that Thether (USDT) had as the only participant. The coins that he will take into account are (TUSD, USDT, USDC, PAX and GUSD).

He is positive about the development of cheap node-in-a-box hardware products that range from consumer products to barebones hardware. He has also said that the average industry cost for a full-node box should trend to $150, even when it can be cheaper.

About Bakkt and Fidelity Digital Assets, he believes that the products and services offered by these companies will have less demand than previously expected. Even after being promoted since mid-2018.

Arjun has also given his opinion about Bitmain, one of the largest crypto mining companies in the market. He is 85% confident that the company might be shutting down this year. During 2018, the company was affected by the bear trend in the crypto market, by Bitcoin Cash’s hash war, for betting on Bitcoin Cash since the very beginning and due to some issues with Jihan We and Micree Zhan, that could be replaced.

He believes that one of the top 10 exchanges will be hacked in 2019 with a 50% confidence about this prediction.

Cryptocurrency adoption can increase only if virtual currencies work as an escape valve for people that live under uncertain monetary regimes. Arjun mentions that some of these countries are Venezuela or Iran. Moreover, adoption will increase if people start believing in Bitcoin as a store of value. There are other reasons that will also help push crypto adoption even further, but he just mentioned a few of them.

He mentioned at the end of the article:

“As I’ve noted before, cryptocurrencies are still in the ‘risk basket’ (along with venture capital) for institutional capital allocators. Particularly considering a broader macro ‘risk off’ scenario over the next 12-18 months, I doubt bitcoin prices will make new all-time highs in 2019 (95% confidence) and think there’s a strong chance we don’t break $8k BTC (60% confidence).”

At the moment of writing this article, Bitcoin is being traded around $4,030 and it has a market capitalization of $70.39 billion.

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