2017 was the most bullish year in the crypto industry’s history, while 2018 was, in contrast, marked by a market depression. And what is in store for us in 2019?
2017 and the first half of 2018 proceeded under a “hold” sign. This period saw many enthusiasts and novices come to the market buying up cryptocurrencies and hoping for a rapid growth. Hundreds of projects were launched every month through ICOs. By mid-2018, the euphoria had finally given way to despondency. The vector shifted towards “build” and the players started acting more knowingly. In this article we will outline the most likely 2019 trends in the industry.
The crypto market new rules from the SEC
The U.S. Securities and Exchange Commission investigates illegal offers of securities and fraudsters’ actions under the completed ICOs.
There are continued attempts by government agencies to define a legal framework for the crypto industry. We can expect passage of a series of laws to finally govern the sector. This will benefit everyone and attract big money.
Stablecoins – a new treasure
2018 witnessed an unbroken trend in the stablecoins’ proliferation. Huobi crypto exchange has recently announced an issue of its own stablecoin.
And in late 2018, it became known that Facebook was developing a stablecoin for the users of WhatsApp messenger. The coin will be pegged to the dollar.
In late December, Mizuho Financial Group, a large Japanese financial company, announced the launch of its own cryptocurrency to be pegged to the yen.
Stablecoin holders will be able to transfer funds to other users free of charge and send the cryptocurrency from their bank accounts to their wallets.
Transition from ICO to STО
The amount the projects raised at the token sale stage dramatically dwindled in 2018. There are a number of reasons for the development with the main one being a more widespread fraudulent activity and a lack of clear-cut legal regulation.
Transition to the STO (Security Token Offering) model will be an important step in preparing the industry for government regulation. This investment model will bring the industry closer to creating a truly decentralised and reliable economy.
STO investors will be equated to share holders and tokens will be considered investment assets. In order to launch an STO, the company will have to comply with the KYC and the AML standards, the SEC requirements as well as the laws that may vary from country to country.
The next step towards launching Bitcoin futures will be taken.
The big traditional stock exchanges are currently getting ready to launch Bitcoin futures.
NASDAQ spokespersons have repeatedly stated that they are considering such an option. In addition, the market is still waiting for the launch of the Bakkt cryptocurrency platform, which belongs to the Intercontinental Exchange platform, which also owns the New York Stock Exchange (NYSE).
Bakkt initially scheduled the launch for late 2018, but later announced a postponement to early 2019. Fidelity Investments, a major U.S. holding company, is also working on a platform that will facilitate entry into the crypto market for institutional and private investors.
Why is it important for the market?
Security continues to remain the crypto market’s key issue, for 31 crypto exchanges have been hacked over the last 8 years. As a result, $1 billion worth of tokens have been stolen. Fund thefts occur on crypto exchanges with enviable regularity and this vulnerability puts off large investors. They need a more reliable tool to enter the cryptocurrency market and Bitcoin futures can become exactly the one.
Decentralised credit networks development
Decentralised credit networks have made a major breakthrough in terms of infrastructure development. Instruments of providing loan collateral have improved and proved their efficiency.
Ideally, decentralised credit networks should help people in the third world countries who are cut off from the global economic system.
Projects like Dharma Protocol, GEO Protocol, Nexo and Maker DAO will advance growth of the credit networks market.
Setting up custodial services
Institutional investors are still waiting for a comfortable environment to enter the cryptocurrency market. In particular, they are waiting for the emergence of custodial services. The investment giant Fidelity Investments intends to launch a cryptocurrency custodial service in March this year. Fidelity Digital Assets will focus on cold storage of cryptocurrencies for institutional clients without launching a trading platform.
This is a landmark event for the entire crypto industry, as professional custodial services are a key prerequisite for the entry of large classical capital.