After a hectic 2018 with plenty of FUD, it's time now to take a look at the starting positions of fundamentals towards the start of 2019. Let's see if the loss of value of most coins corresponds with the general state of the market, and what could potentially be the game-changing trends to come.
Maybe more of an ongoing trend, but it seems as if stablecoins will continue to be a thing in 2019. Even more perhaps with the recent news confirming that Tether packs some solid dollar bags at their Bahamian bank or the latest reports regarding Facebook’s launch of a stablecoin in India.
Scalability limitations on cryptocurrency networks became evident to all around the all-time high one year ago. With Crypto Kitties collapsing Ethereum and Bitcoin fees tearing the rooftop while transaction confirmation times became excessively long, it was clear that something had to be done about scalability.
Lightning network for Bitcoin increased block size for Bitcoin Cash, or the Raiden Network for Ethereum and the ERC20 family, are all different solutions towards avoiding the blockchain consensus bottleneck.
As 2018 has seen many of these projects rolling out for the first time, it could be expected that in the next year their pros and cons will be judged by the markets.
Will STO’s finally take over ICO’s?
Funds raised through Initial Coin Offerings (ICO) have dwindled along 2018, as it can be seen from the following graph extracted from CoinSchedule. However, the Security Token Offering (STO) market seems to be gaining traction, although data for the current exercise don’t allow a proper comparison.
The underlying difference between STO and ICO is that tokens coming from the first can be redeemed for an asset which they tokenize, meanwhile ICO tokens are intended to be used as a means of currency. For example, a currently ongoing STO allows investors to take a stake of a Swedish real estate company which builds residential houses.
One of the main advantages of STO’s is that they are mostly not colliding with existing legislation nor requiring new ones, excepting the Chinese case. In the U.S. they can be regulated by several existing frames, some of them related to crowdfunding.
Regardless of the (in many cases savage) downtrend in prices along the market in 2018, the number of users of cryptocurrency and blockchain related technologies keeps on rising. As an example, the number of wallet users has not stopped its growth, as the data available this far assures:
Alsogame-changing BUIDL goes in the direction of increasing adoption and has been much mentioned along the ending year. Perhaps 2019 will be the time when we will really notice its effects on the market, as CZ seems to believe:
What do you think will be the trigger for the next bull run?— CZ Binance (@cz_binance) December 8, 2018
(I get asked this question often, and honestly, I don't know the answer, other than keep building)
Regulatory and institutional normalization
Already January seems most promising on the big player's field with the launch of Bakkt, regardless of the final date possibly changing.
The platform emerging from the partnership between Microsoft, Starbucks and NYSE owner Intercontinental exchange won’t be the only irruption of traditional stock exchanges in the crypto space: both Nasdaq and the operator of the Stuttgart stock exchange will be offering similar solutions to the public.
Regulatory organisms have also been evolving in their positions, with institutions such as the IMF focusing now much more on the opportunities created by blockchain based assets, and the SEC taking a more active role in moderating the market. The approval of an ETF, many times delayed, could definitely take place next year and it would most likely bring price movements attached.