2018 started with high expectations with many imagining the bull run that crypto experienced during the end of 2017 to continue. But, this year turned out to be nothing like what was expected. One could say that 2018 is the worst year in the brief history of cryptocurrencies. Prices tumbled, ICOs failed, scams, hacks and regulatory crackdown all lead to a devastating performance, thereby reducing what little confidence people had in this new technology. But all is not lost and many are optimistic that 2019 will turn out to be better than 2018. With the new year on the edge, we look at the trends and outlooks that one needs to watch out for going into 2019.
The price of Bitcoin has sometimes fluctuated by as much as 70 percent in the past. This kind of volatility will slowly die down soon enough. Even in 2018, the price showed a midterm trend rather than a sudden 24-hour shift. There were many such events but their frequency and number have gone down significantly. As more institutional investors come into the crypto space, this will further reduce such sudden changes in price. As this uncertainty is what keeps many away from crypto, reduction in volatility will increase the confidence of investors.
Institutional investors have been hesitant to enter into the crypto market, but some have small holdings in this new market and plans to expand in the future. JP Morgan in its report quoted crypto as an institutional investment class. Traditional exchanges are planning to list cryptocurrencies in the coming years. Various companies are trying to make investments into crypto easier and with the entry of institutional investors into the market, we can expect short-term volatility to subside substantially as well as huge investments to be injected into allied projects and products.
It might be many years before cryptocurrencies will go mainstream but the infrastructure needed to support that adoption is being built at an accelerated pace. Regulators are working on the issue to bring clarity and futures contracts on crypto will see more takers in the coming year. Companies are trying to integrate crypto into their products and many will see a rollout in 2019, like the Bakkt trading platform. Stock markets like Nasdaq are planning to list cryptocurrencies for trading although scalability will be an issue. Even though many thought in 2018 that cryptocurrencies and their underlying blockchain technology would go mainstream, 2019 will see an accelerated path to adoption.
ICOs had a good run at the start of this year with some bringing in around 2 billion, but this has caught the attention of regulators. ICOs were at their peak in February this year. They brought in 2500 million dollars to new projects and since then the number has gone up to 65 million. With new regulations giving a legal framework for ICOs, they could see a new resurgence as more institutional investors will be willing to invest in them with the newly gained legal backing. The recent events in Japan show what ICOs’ future might look like.
Cryptocurrencies experienced the full force of regulators in 2018 as some countries even went as far as banning any crypto related activities. China banned ICOs and so did South Korea. China went one step further and cracked down on mining and miners. India banned banks from holding or trading crypto assets and prevented banks from dealing with entities involved with crypto, effectively halting most crypto activities within the country. Going into 2019, a new hope is on the horizon as countries are opening up and is starting to give legal backing to crypto assets. Some countries like Thailand and Japan have already made many aspects of crypto trading legal and more countries are expected to follow suit.
Even though there is not much excitement going into 2019, many things are happening in the background. The market is more mature than it was going into 2018. There is a long way to go before crypto to can go mainstream but 2019 will be a big defining year.