The 2018 downtrend has shaken a lot of people out of the market. Some people have used the opportunity to learn more about what this new industry is all about. Now we are seeing rising use of the term “buidl,” which is a variant of “hodl” but means to do something to grow and develop the blockchain ecosystem.
Institutional entities both private and public have helped to pump the brakes of the cryptocurrency trend, which they’d largely been unable to do in previous years. However, regulations also help to define the path for cryptocurrency in the future – and it’s an optimistic one.
The coming year should see some trends in crypto regulation play out that provide a more rose-colored lens through which to view the market, when compared with 2018.
We at CoinSpeaker thought it will be good to watch for these developing trends:
1. SEC Progressing in Efforts to Define New Digital Currency Regulations
The U.S. Securities and Exchange Commission (SEC) has been investigating illegal securities offerings and scammers in the ICO market.
Some experts suggest that most of the ICOs can be considered securities offerings. In order to avoid this calcification, some ICOs adopted the term ‘security-token.’ There are also major efforts on both a national and international level to reach a consensus on how to define and deal with the new world of digital currencies. Expect ongoing working groups to publish supportive whitepapers that lead to a global consensus.
The ICO phenomenon has raised over $22 billion in the past few years with very little in the way of major accomplishments, aside from fraud and failed projects. Regulators have gone on the attack to jail the offenders, and lawyers are looking for the high ground. Expect many new issuances to be “security compliant”. If exchanges want U.S. customers, they will heed this trend, as well.
2. Stablecoins Continuing to Be a Thing
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.
3. Blockchain ICO Consolidation, as Winners and Losers Emerge
The phrase “consolidation” has been bandied about during 2018, but it is a trend that will be healthy for the industry. One reporter, who characterized the present as being reminiscent of the early 2000s, said:
“Things always get interesting when the fast-buck fools flee for higher ground.”
The incubation period is over. Projects that are getting better at what they do will move ahead. The stragglers will fail and close their doors or be acquired. However, there is a question will STOs replace ICOs?
Amazix head analyst Jose Macedo believes the security token offering (STO) will become the standard model most crypto-based projects deploy.
“While utility tokens are far from dead, what the industry has now realized is that few of these token economic models actually made sense in terms of long-term value capture. As a result, we’re seeing a lot of projects come to us looking for help in either launching their STOs or restructuring their ICOs as STOs.”
4. Bitcoin Futures Taking the Next Step
Major exchanges such as Bakkt and the NASDAQ are preparing to open futures contracts offer a new service with new implications. Bakkt, owned by Intercontinental Exchange, which also owns the NYSE is a futures trading and storage platform for crypto contracts. Many expected that the exchange would launch in Q4 2018, but now the date has been tentatively set for mid-2019.
At the same time, NASDAQ is also planning to offer Bitcoin futures trading to investors in the market. Fidelity Investments is also working on a new cryptocurrency platform that would allow firms to enter the crypto space.
5. Decentralized Credit Networks Taking Off
Decentralized credit networks made huge strides in terms of infrastructure development. The tools necessary to facilitate collateralized loans, social credit, and open finance have been fine-tuned and proven to work. 2019 will be when they scale up and start to serve the sort of users they were envisioned for – global citizens who’ve been excluded by the current financial system.
Crypto debt markets and credit networks will be bolstered by the growth of projects like Dharma Protocol, GEO Protocol, Nexo, and Maker DAO. 2018 was all about ETH, but in 2019 Maker will accept BTC, ERC20s and other crypto and non-crypto assets.
6. Custodial Services To Be Created
Institutions are waiting for a safe environment to enter the cryptocurrency world. They are waiting for custodial services to be created. Many big players are working on such services to help institutions to enter. One of them is BlackRock who currently manage a modest amount of $6,28 trillion. They are not alone, the worlds biggest cryptocurrency exchange Coinbase and Goldman Sachs are other examples that are working on similar products. We are not there yet, but the infrastructure is being built in front of our eyes.