After the insane cryptocurrency rallies of 2017 and their spectacular crash in 2018, the next year, according to those in the know, may be a year of relative calm, which at times may feel like stagnation. This will allow the market to take a breather, purge itself, figure out the regulatory environment, and determine the direction of its continued development.
We at ICOBox are fairly certain that this is exactly what will happen, but regardless, we have put together a list of six unlikely, shocking and even fantastical predictions for the 2019 crypto market, each of which may act as a catalyst for either the next crash or the next boom. Please do not rely on our ideas in deciding to support a particular crypto project and do not take our forecasts as something that will come to pass in part or in full.
Nasdaq Will Gobble up Binance for $1 Billion
In early December it came out that Nasdaq, one of the world’s biggest stock exchanges that trades high-tech stock, officially confirmed that it will be launching a cryptocurrency platform in the first part of 2019. The new platform will come live as soon as the US Commodity Futures Trading Commission (CFTC) grants the exchange the necessary approval.
It is not implausible that once this happens, Nasdaq will attempt to acquire Binance – the biggest cryptocurrency trading platform. The deal may be extremely advantageous for both parties. Because of the ongoing crisis on the crypto market, the number of active transactions on Binance dropped by 9/10 compared to January of this year. And even though in one of his recent interviews Binance CEO Changpeng Zhao claimed that his company is not concerned about the drop in the trade volume, he is likely not being perfectly candid here – to ignore these numbers would be unthinkable.
Nasdaq in turn has never denied their interest in the crypto market, and once they obtain the CFTC approval, they will have all the aces to proceed with the plan. How high much will Binance go for? Bitstamp, which held the 11th place in the world in terms of the 24-hour turnover, was sold this year for $400 million. So it is not unreasonable to expect that Binance, with its two ready to roll ambitious projects – Binance Chain blockchain and decentralized exchange Binance DEX – will go for a cool $1 billion.
In the Event of the Worldwide Crisis 10 Countries Will Be Launching Their Cryptocurrencies
The era of the US economic growth is coming to an end, and investors are seeing first signs of the impending recession: the yield spread between long and short US treasury bonds has recently took a nosedive, landing in the negative territory.
Last time this happened in 2007, shortly before the infamous Lehman Brothers collapse. This points to a likelihood of a looming global economic crisis in 2019, which will trigger another currency crash in the developing world. To avoid this, small countries can try to “digitize” their money, following the example of several countries that are under economic sanctions. By creating new virtual means of payment, they will attempt to avoid a massive issue of fiat money and the ensuing colossal inflation.
Following Venezuela and Iran, Ukraine is now testing the alternative currency waters. Their National Bank launched a research project to implement Electronic Hryvnia, which will be traded at 1:1 with regular hryvnia. Ukrainian crypto exchange Kuna has been busy developing a national stablecoin (working name “cryptohryvnia”) since 2017. The new coin will have properties of various types of coins depending on the transaction and will be used as an alternative to traditional legal tender.
These cryptocurrencies are unlikely to be of much use in international settlements in the event of a massive national currencies crash or ramped up sanctions. Indeed, it is much more likely that if dollar were to be pushed out as a main settlement instrument, it will be replaced by euro. But the use of national cryptocurrencies can be quite effective for preventing public panic on local markets and among citizenry. We cannot exclude that as many as 10 new countries will be launching their cryptocurrencies in the event of a global crisis.
Ethereum to Drop to $1
Like most major cryptocurrencies, Ethereum shot up between December 2017 and February 2018, i.e. in the balmy days of the crypto market. Having gone through a subsequent one-time upsurge in May, the currency took a downward turn, moving further and further away from Bitcoin.
At the same time, the number of successfully launched and completed ICOs also decreased rapidly, and these trends were definitely related. Ethereum blockchain allows to easily create and issue new tokens – a feature very much enjoyed by new startups, as the vast majority of projects conducting ICOs were based on Ethereum capacities.
The crypto market’s “nuclear winter,” which was accompanied by the 70% drop in market capitalization, the crash of all main cryptocurrencies, and the massive shift away from ICOs, may cause Ethereum to lose most of its value. And even the $1 scenario doesn’t appear impossible at this point.
Bitcoin will be the Only Top 50 Currency to Continue Being Mined
The global crash of main cryptocurrencies caused a collapse in the mining industry. Things got so bad that Chinese miners started selling their mining rigs for scrap rather than as valuable pieces of equipment. Nvidia, one of the world’s biggest manufacturers of graphics cards for gaming, which are used for mining, announced that it will be moving away from the crypto industry after their sales in this market dropped by 5.5 times.
While the situation in the industrial, corporate mining is critical but not yet hopeless, the profitability of cryptocurrency mining for individual small-time miners is nearly at zero. This makes it quite possible that in 2019 bitcoin will remain the only profitable currency to mine out of the top 50 tracked by CoinMarketCap. Considering that the foundational currency’s market share remains at over 50%, and that situation is unlikely to change any time soon, this scenario cannot be excluded.
STOs Will Carve a 10% Share of the Securities Market for Themselves
The ongoing stagnation in the crypto industry, the decreasing number of ICOs, the lack of concise and definitive legal regulation, the crash of all major cryptocurrencies and their wild volatility are making the market seek new development routes.
Small players who often didn’t look past the initial money collection will come to be replaced by major investors, including institutional investors. They are looking for a different environment and transparent, clear rules of the game.
This is why we are watching the birth of an entirely new but extremely promising market segment – that of security tokens, which meet the regulatory requirements and open access to traditional capital for startups. This is a well understood and familiar instrument for professional market players, and all signs point to 2019 becoming a year of STOs (Security Token Offerings), which will replace the now-obsolete ICOs.
And considering the growing interest of major multinationals in security tokens (and our own interest in extraordinary and improbable scenarios!), there is a chance that STOs will carve for themselves 10% of the securities market.
Central Banks Will Convert 20% of Their Reserves into Bitcoins; BTC to Surge up to $200k
Recently, the Swiss Financial Market Supervisory Authority (FINMA) determined the maximum amount of crypto assets share in the total capital of the country’s banks. The limit is set at 4%. Taking into account that Switzerland is eager to become one of the world’s leaders in the crypto space, and that many of the world’s governments look to the country for guidance in bank management, this decision has every chance of becoming the cornerstone principle for other major financial institutions.
However, when the 4% number was first announced, the Swiss regulator most likely was considering the current market potential rather than the likely global financial crisis situation we mentioned earlier. The new crisis may cause the price of gold to collapse.
This is what happened in 2008, when the world went through the most devastating economic paralyses since the Great Depression. In 2008-2009 the price of gold dropped from over $1,000 to $700 per ounce. A new crash of the price of the planet’s most precious metal will force banks to quickly find alternative safe havens for their rapidly vanishing reserves – and 20% of them may be converted to bitcoin. Which will make bitcoin price surge up to $200K.