The prospect of exponential growth that the cryptocurrency offers comes at the cost of entering a market that is as volatile as it can get. The year of 2018 saw the remarkable collapse of the crypto bubble yet the market is here to stay and thrive as it matures more than ever.
The complexity of the market and the ever changing narratives make it hard to predict how the market will swing. Even market gurus have at several points in time been thrown off the mark when it comes to envisioning how the crypto market will move. However, there are certain broad themes that will surely affect the way the market will swing in 2019. There are 6 major trends and themes that every investor and trader engaging with crypto must know.
1. Growth of Decentralised Exchanges
Centralised exchanges are proving to be a lucrative target for hackers and regulators as they offer a single point of failure. While centralised digital asset exchange platform are proving to be a weaker option, the plethora of decentralised crypto exchange software choices coming up online are showing the way forward. DEX brings to the average trader the experience of transacting on the blockchain; it promises an equitable and transparent market. Currently there are about 200+ DEX listed on the index and big ones like IDEX have close to 20,000 transactions every period. DEX platforms are set to grow faster than ever in 2019.
2. Price will decrease before the next boon
The collapse of the crypto bubble in 2018 has given to rise to a wave of caution. Just like how every asset-class moves, the prices are sure to decrease further (reports suggest that Bitcoin on the white label crypto exchange will drop to as low as $3,500) and go down deeper before it gears up for the next big boon which is on the charts. What traders and investors need is to trade at the right levels when the prices are set downward and wait for the boon to unfurl.
3. Valuation models will provide stability
Crypto investors and traders are often chided about the fact that cryptocurrency has no inherent value. The market has always lacked a valuation framework which has made it difficult to connect prices with their basic trends; much of the market movement, time and again, has been powered by sentiments alone. Several notable thinkers in the crypto-space are attempting to bring a valuation model to the forefront. As these models get refined with time, the market will gain further stability.
4. Pulling in the Institutional Investors
Even though the 2009-created crypto-ecosystem aspired to be unregulated; it is hard to meet its aim of being all-inclusive without adopting regulations. In 2018, several countries have come forward to provide proper regulations and it will be a noteworthy thing for the crypto-world in the coming months and years, even. This will also help pull in the traditional investors as they will be happy to invest in a regulated space and the newly-pumped cash will restore crypto’s glory.
5. Enterprises are going the crypto-way
Large companies around the globe are increasingly becoming more interested in spearheading the crypto-ecosystem. It has shown on several instances that it can sustain a long period of bad market and can at the same time unfurl at great heights. Also, the undeniable potential of cryptocurrency is pulling in enterprises and the year of 2019 could see many adopting crypto into the mainstream. Adopting crypto (and blockchains) will help prevent fraud, save money and increase efficiency.
6. Bitcoin ETF Pulls in the Official Investor
ETF proposals in 2017 had been quashed by the SEC owing to the volatile nature of cryptocurrency and the illiquidity factor. However, the coming years might see a favourable ruling over the ETF matter. This would also give a much needed boost to the base prices and will also help pull in the official institutional investors. Many have been waiting to jump into the market and a positive ruling on ETF will be just the approval that they need. The coming months might mark the beginning of it.
Further Influencing Trends of the 2019 Crypto-Ecosystem
Apart from these influencing factors, there are some interesting trends that could further predict how the market will move in the next few months. The growth of app platforms, acceptance of security tokens and more will also influence the market. Some interesting trends to lookout for include –
The coming months will see people adopting (and taking to) security tokens more than ever. Security Tokens, unlike ICOs, are compliant representations of ownership, as used in traditional investment options like bonds and equities. The STOs are increasingly replacing the ICOs. They also have a large addressable market with over $70 trillion in the US itself. The coming months are set to see things change significantly and will also pave way for more reserved investors to confidently get into the market.
The year of 2019 will see the growth of decentralised apps and crypto exchange software becoming prominent in the crypto-ecosystem. Several dApps have come up in the past years including the CryptoKitties which was a viral fun game built using blockchain where players collected digital cats; in Dedc’17 about $2 million worth of novel tokens were being traded daily. As the scalability of these app platforms will progress along with increased transaction capacity, more applications will develop on these platforms.
The crypto-market is going to witness mass adoption and reach out to people who have stayed away for long. If reports are to be believed, Asian countries will take the lead and others will follow soon. The coming months will make crypto more accessible and lead to increased adoption.
If you are a trader or an investor in the crypto-ecosystem then be prepared for the coming months which promises to be turbulent yet rewarding in their own ways. The market is set to see several significant changes as it matures and develops into a better defined market and witnesses newer innovations and regulations. It would do good to heed the trends and predictions for the coming months and make use of it.
Max Hunt is a very early Bitcoin adopter and knows the who’s who of the Crypto world. He’s been in the Bitcoin fraternity for a long time, and explores various nuances of crypto exchange software development.