The cryptocurrency sector is full of surprises. It is a young industry, with a lot of promise and a lot of speculation surrounding it. We’ve decided to gather thoughts and insights of crypto and fintech experts on how the crypto industry will look in 2019.
Institutional capital will enter the market
Industry experts are waiting for an influx of institutional capital. Hu Lyan co-founder and CEO of Omniex and former senior vice president of State Street claims that the crypto industry will go beyond the retail market:
“2018 has also shown that crypto and blockchain have clearly caught the attention of institutions. With crypto moving beyond the retail market, companies like Fidelity, ICE (parent of NYSE), NASDAQ, Microsoft, Starbucks and a host of Ivy League endowment funds have all either started initiatives or invested in the space”.
The same thought was expressed by Henri Arslanian, FinTech & Crypto Lead for Hong Kong & China at PricewaterhouseCoopers in his interview with Bloomberg TV. He expects more players to enter the market. Also, he noted how important such movements are for the industry:
“It will bring a level of institutional expertise and experience to the sector, which crypto needs, especially today.”
The interest of institutional players in the industry is clear. First of all, the launch of the investment platform Bakkt by the NYSE is planned for 2019. Bitcoin will be the first digital asset traded with other fiat currencies there. The platform has already partnered with Microsoft Technology Corporation; the Starbucks international coffeehouse chain; and The Boston Consulting Group (BCG), a large consulting firm. Besides, NASDAQ - the second largest stock exchange - is going to launch bitcoin futures in the first quarter of 2019 and Fidelity plans to establish Fidelity Digital Assets with 4-5 of the biggest coins based on marketcap. Hu Lyan expects that such expansion of the crypto ecosystem will empower institutional investors to take part in the “crypto and blockchain revolution”.
Stable coins will be more popular
Stable coins will be one of the key drivers for cryptocurrencies in 2019. Such opinion was expressed by The Chief Investment Officer at CCL Investment Management, James Bevan, at the Bloomberg Crypto Summit held in December:
"In fact, two areas of growth for the industry will come from low-volatility tokens known as stable coins and so-called security tokens, digital contracts that represent ownership of assets such as real estate or stocks.”
Another panelist Lewis Fellas, chief investment officer at crypto fund Bletchley Park Asset Management, also expressed the idea that the boom of stable coins is coming:
“One of the hottest crazes in the world of crypto this year, stable coins, still has plenty of room to run. While some estimates put the number of projects in development at as many as 120 we are only in the early innings of the proliferation.”
Real-world backed coins like Tether or DAI were more popular among investors during the market crash in November. According to Coindesk, stable coins showed 200% growth in 24-hour trading volume when the market dropped. What is more interesting is that Diar found out that on-chain transactions of fiat-backed coins increased by 1032% in November, compared with September. The lack of volatility combined with the same level of innovation and digital functionality as other cryptocurrencies explains the rise of stable coins at the end of 2018.
STOs instead of ICOs
After the ICO boom, which raised $7 bln. in 2017 and more than $13.7 bln. in the first half of 2018, many experts say that STO (Security Token Offering) will take over. STO’s superiority is explained due to its increased security and low chances of fraud. It is a financial tool pegged to something real, like the revenue or profit of the company. For instance, Carlos Domingo, co-founder of Spice VC and CEO and co-founder of Securitize, explained:
“We saw the insane amount of money being raised on the Ethereum blockchain, but we also knew that raising capital for a business was, and always will be, considered issuing security. We also immediately saw the potential for digital securities due to their numerous advantages over traditional securities, so it was very obvious for us what we should do.”
Also, a former JP Morgan trader, and current chairman of crypto investment provider CoinShares, expects that many projects will be encouraged by the success of Overstock’s tZERO security token offering. The company raised $134 mln in August, so STOs will gather significant momentum in 2019:
“The market can expect well over a billion, and anywhere up to US$2-3 billion in issuance in 2019.”
With the rise of STOs, the quality of blockchain projects will improve. For example, Atsushi Hisatsumi, founder of the marketing agency for blockchain projects Extravaganza says:
“The token model is going through a change. Companies are beginning to realize that not all projects need tokens, and STO with real reinforcement of assets will become dominant.”
Bitcoin price predictions for 2019
Of course, we can’t avoid dealing with such a hot topic, especially after the huge Bitcoin price drop at the end of 2018. It is impossible to predict the price of BTC, but we decided to take a look at some estimates and thoughts of industry players. Let’s see what they expect the Bitcoin price to be in 2019.
Samuel Leach, CEO and founder of Yield Coin, remains optimistic even after the market collapse and expects that Bitcoin will rise to $10000-$15000 in 2019. Galaxy Digital CEO Michael Novogratz made a more bullish price prediction for Bitcoin and claimed that the coin can skyrocket to $20000 or more in 2019. They explain such pronounced recoveries with the increased interest from financial institutions and custodials. The experts are sure that it will lead to the price of BTC rising.
CEO of CoinMetro, Kevin Murcko withheld commenting on the future price of Bitcoin because “Bitcoin’s value will continue to be driven by a great deal of financial speculation”. But still, he notes that Bitcoin will keep the leading position on the market. It has a high reputation and better liquidity compared to other coins.
Basically, the experts are positive about the market and industry development in 2019. They see 2019 as the year of STOs, venture capital and even the rise of stable coins. Do you agree with them? Share your thoughts on our social media pages.