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The effort that goes into anticipating how the thousands of assets in the crypto market move is enormous, but even greater are the various factors behind this movement. It takes a multifaceted approach to comprehend the components making this young market tick, let alone anticipate how they’ll act. Though the ICO-funded, distributed participation model is thought to be the future, it’s still a virtual Wild West and will surely evolve several times as it matures. This makes it more volatile, and for a greater number of reasons, than other asset markets.
There is nothing more obvious in hindsight (yet much less predictable) than the cryptocurrency markets. This is obvious from the bullish streak from late 2016 until early 2018. Many forget that even on the way from $1,800 to $19,000, there were as many Bitcoin pessimists as there were optimists. Now in the year following this bullish run, every dip lower is predicated by calls proclaiming, “the bottom has arrived”, or “last chance to buy BTC under $6k!”. Getting perspective as a trader, or even as an enthusiast, is only possible by cutting through the noise. Here are ten cryptocurrency predictions for 2019 based upon observable trends.
The First Crypto ETF
Bitcoin is the best candidate for the world’s first ever cryptocurrency ETF (Exchange Traded Fund), which would increase its accessibility to institutional and retail investors and directly affect its value. This cannot be said for futures or other derivatives. Many companies have lobbied the SEC on behalf of their own Bitcoin ETF, but all were rejected. Analysts like CNBC’s Brian Kelly anticipate that the first will likely be approved by February 2019.
Rise of Decentralized Exchanges
Centralized exchanges like Mt. Gox (RIP) are hackable, impose fees, and require downtime that is getting harder to tolerate given decentralized alternatives. Though the first decentralized exchanges were slow and starved of liquidity, projects like Kyber Network are helping to solve this challenge. Decentralized exchanges can now share liquidity, and users enjoy the ability to control their own private wallet keys. As the ecosystem improves expect these exchanges to make a resurgence.
CryptoKitties was the first glimpse that enthusiasts got of a real decentralized application gaining mass attention (and value). Though it is also a great example of how difficult it is to scale the blockchain, projects like Ethereum’s Casper will help the decentralized computer to move past its growing pains in 2019. This is when the first applications on blockchain will build a significant audience and let crypto investors participate in a new frontier for technology.
With recent indications from the SEC that some cryptocurrencies would be considered securities, there are veterans in VC and finance making big bets that security tokens will be the next gold rush. Tokenized equity in real estate, classic cars, vintage wine, art and virtually every other asset will be available via mainstream channels. The better cost-efficiency of this model will make these assets more accessible to retail traders and create a richer variety of investment for all.
Market Will Settle Down
The next year should see the market settle down some, and it isn’t just because of post-bubble dynamics. Cryptocurrency trading remains as profitable as ever, even if the value of coins is suppressed, which is how companies like Coinbase can rake in hundreds of millions during the biggest downturn of all time. Other companies are also looking to tame the immature markets with AI, predictive analytics, and valuation tools, which are shown to tighten spreads and help assets discover prices naturally.
Gaming Comes to Crypto
Just as a company can raise money for a blockchain service platform by selling tokens, so can a game development company. Games built on blockchains and using tokens as in-game currency are just one way that crypto is making headway into this enormous, lucrative sector. Other innovative companies are building decentralized marketplaces where items from a diverse array of online games can be bought and sold with cryptocurrency. Longer development cycles for these projects means that the plethora launched this and last year will come to fruition in 2019.
Retailers and Crypto at the Register
A new partnership between Microsoft, Starbucks, and ICE (International Exchange) is just one indication that retailers are finally ready to accept cryptocurrency as an easy payment method. Other merchants will soon see the benefits being reaped by Starbucks as customers pay for their coffee with Bitcoin, using new and faster infrastructure that didn’t exist at this time last year.
Banks Ready to Bet on Crypto
Ripple is one of the biggest names merging the institutional finance and blockchain worlds together and has signed several international banks to its pilot program. The company has proven how using cryptocurrency can save these banks millions in settlement costs and indeed has already done so. Though it won’t come in the form that speculators would prefer, banks will surely invest much more in 2019.
Resurgence of Privacy Coins
In times of change like today, obsolete beliefs and ideas about blockchain are challenged by new ones, and legacy platforms that remain relevant grow in acclaim. Privacy coins have a singular, contemporary purpose that will always be in demand, and even more so as cryptocurrencies like Bitcoin are further proven to be intimately trackable.
The Market Will Rise
Just because the prediction is easy to make doesn’t mean it’s less likely: the cryptocurrency market will grow in 2019. Even now, the price of most cryptocurrencies is still up year-over-year. Given market sentiment—the “despair” phase of the self-fulfilling bubble pattern—there’s now an excess of headroom. It helps that countless expert analysts have concluded the same thing. Next year will be another one to watch closely, as Bitcoin passes the decade mark, regulators give fur