A friend told me in February that a week in crypto can sometimes feel like a lifetime. What about a year in crypto then?
Let’s take a quick look at the year that was and the future of the crypto-industry in 2019.
In what can only be described as crypto’s annus horribilis ( old-timers know better), the total crypto market has shed over 700 BILLION USD since Jan 1, 2018, and at the time of writing it’s worth an emaciated 120 billion USD.
With 2018 on its last legs, it’s clear that Bitcoin will not be making that bounce this year. No Christmas miracle this year, sorry kids.
Crypto’s flag bearer is still getting mauled by the bears, clinging to life above the 3500 USD mark, a far cry from the robust 13,500 USD price on January 1st, 2018.
In fact, things might likely go down way further south before it gets better, driven by more recent bad news such as the Bitcoin Cash split, Bitmain lay-off and today’s alleged phishing attack on popular bitcoin desktop wallet Electrum. (https://cointelegraph.com/news/phishing-attack-on-electrum-wallet-nets-hacker-almost-1-million-in-hours-report)
Bitcoin’s meltdown in the final quarter this year drove the following hard truths home in no uncertain terms:
- Yes, the 2017 surge in Bitcoin’s value was for all purposes a bubble in the making and the result of market manipulation and FOMO.
- You should’ve listened to all those Facebook non-believer friends of yours, rather than the Twitter feeds of self-appointed “experts” whose technical analysis reports grew more bipolar as the year grew long.
- Crypto winter isn’t just coming. It’s already here.
So what went wrong? Are the prospects really that bleak?
Certainly not.
While 2018 was terrible in terms of price depreciation and gave a bad blow to the public’s perception of cryptocurrencies, the year yielded many successes that should be considered in a non-monetary light.
Foremost for me were the following:
1.The Advent of the blockchain
The reputation and value of almost all cryptocurrencies took a collective beating this year.
Blockchain, however, crypto’s underlying technology, experienced a massive uptick in interest from institutions, organizations as well as the general public.
Blockchain is now almost universally seen as a legitimate problem-solver and a next-big-thing disruptive technology that should hopefully soon positively impact many diverse industries ranging from healthcare, finance, retail and NGO’s, to the potential benefit of billions.
It’s still a leading candidate for the zeitgeist of 2019 in terms of technological advancement.
2.Institutions and Governments Didn’t Say Yes (But They Didn’t Say No)
An exhausting amount of discussion was had this year surrounding the validity, legality and future opportunity of crypto.
While government bans in early 2018 left the industry in flux, there has been a lot of progress made and frameworks laid out later this year to help facilitate the fair regulation of the crypto industry and get anyone from Big Business to Uncle Sam aboard.
While an SEC-approved ETF is probably still a long way off, many governments made a decisive U-turn this year, favoring strong AML and KYC legislation over banning crypto outright.
3.New Kids On the Blockchain
They grow up so fast, don’t they.
Buoyed by unbridled optimism, all-time highs and dreams of morphing into the next Bitcoin or Ethereum, this year saw several projects germinate from fledgling ERC-20 (Ethereum) or NEP-5 (NEO) tokens into independent mainnets, ready to build their own eco-systems.
Most of these projects, which include names like EOS, Ontology (ONT) Tron (TRX), Ziliqa (Zil) VenChain (VEN) and Cardano (ADA), have long roadmaps, growing communities and a well-funded war chest to lead the industry beyond 2020.
4.Survival of the Fittest
The party’s over and the lights are on for the plethora of shitcoins, ICO cash-ins, pump & dumpers, con artists, and shillers who swarmed in and whipped everyone into a frenzy in the wake of Bitcoin’s ATH in December 2017.
The collective rebuilding of crypto’s reputation is one of the biggest obstacles that all legitimate existing and new projects will face in 2019. Almost all new investors took a beating in 2018 and many will never invest again.
Maturing current projects and a more discerning casual investor will create stronger barriers to entry and competition, which means that coins will have to rely less on hype and more on demonstrating actual usability next year.
5.Lower expectations
There were hard lessons in 2018 for everyone in the crypto space.
Rumors and confirmations of price manipulation, exchange hacks, Mt.Gox’s specter, Tether fraud, BTC futures, Bitcoin Cash and the failure to get an SEC-approved ETF locked in before 2019, all took turns in driving the market down in waves from which the bulls are yet to recover.
While Bitcoin took an almighty beating, many altcoins are more than 90% down from their all-time highs at the beginning of the year.
Most crypto investors can be excused for showing signs of PTSD at this stage. These tough lessons learned will hopefully result in a more gradual rise in the value of Bitcoin in 2019, making it more crash-proof.
Then again, who knows, where we are on this graph.
While it’s been a rough year, there’s certainly reason to be optimistic about 2019, starting with the anticipated entry of big new players such as Bakkt.
For the last day of 2018, the Counting Crows sum up my thoughts pretty succinctly.
It’s been a long December and there’s a reason to believe
Maybe this year will be better than the last.
I can’t wait to see where we are this time next year.
Happy 2019!
