What do the next 12 months look like for the crypto world?

I always find that the first month of a New Year is the busiest. It’s when key campaigns start to take shape and you start formally visualising what your company is going to look like in 12 months’ time. However; when you work in crypto, what happens outside the business is just as important. That’s why I wanted to share with you some of my key predictions for crypto in 2019.

The fall of ICOs

ICOs were a great way to democratise early-stage funding, but unfortunately, they often resulted in thousands of scammed investors. Many notable companies made big promises but were more interested in raising money rather than doing business. While these examples may have permanently altered public perception of ICOs, roughly 20% of ICO companies have successfully delivered their vision to market, including Neo, Ethereum, Pigzbe and Waves, to name but a few. Nonetheless, the term ‘ICO’ has become tarnished and in 2018 it became associated with scams and quick money. Two key trends emerged in 2018 amongst ICOs — I believe these will continue in 2019:

  1. ICO crackdown. As we all know, regulations and law enforcement can appear slow to take action but sooner or later most of the bad players are punished accordingly. The SEC has issued cease and desist letters for a few ICO companies in 2018, and it’s likely that we will see more of these as the number of investors demanding justice grows. Interestingly, there are new media sites and forums (theblockcrypto.com and twitter.com/lawmaster), which focus solely on revealing the truth about the biggest ICO scams in the industry. Have a look — you’ll be shocked by some of the things you find in there.
  2. STO (Security Token Offering). STOs share some similarities with ICOs, but issued tokens are primarily linked to company shares or company performance. In addition, they fall under the existing crowd-funding legal framework. The number of companies and platforms using STOs as fundraising tools will definitely grow in 2019.

Trend for tokenization

While we’ve seen a lot of tokens die as a result of failed ICOs, the number of tokens that represent real assets is growing rapidly. An increasing number of companies are trying to put their assets on the blockchain, as it makes it easier to manage ownership and move them from one counterparty to another. What’s happening right now is the beginning of the token economy. In the coming months, I believe we will see more tokens: cryptocurrencies, crypto commodities and other tokens that represent real-life assets.

Market consolidation

The crypto winter caused widespread disappointment amongst retail investors and forced many companies to rapidly decrease staff numbers. Recent examples include ShapeShift firing a third of its staff, Bitmain firing up to 60% and Consenys firing 50% — and there are plenty of smaller companies about to follow suit. Despite this, the hardship of crypto winter has given others the opportunity to cement their positions in the industry. Big players like Coinbase are either buying out or investing in smaller companies thanks to their current low market valuation — Circle’s acquisition of Polonex is a notable example. This market consolidation trend has only just started and the list is sure to grow in 2019.

More real use cases

2019 is the year in which we will start seeing more real use cases, mainly because the hype is over and it’s time companies focused on solving problems rather than trading and speculation. It takes time to get things off the ground, but this year I’m confident we will see more projects solving real problems using blockchain technology. Personally, I think payments is just one of the areas in which we will see progress:

  1. Stable coins (there are more than 40 of them right now) will start to replace other digital assets in payments. Stable coins have a few advantages over digital assets: they aren’t volatile (which is exactly what we need in the payments industry) and they don’t require liquidity providers like exchanges or OTC brokers (because they can be easily converted to a fiat equivalent).
  2. We will see a rise in “2nd layer technologies” such as the Lighting Network, in which Bitcoin is used not just as digital gold, but as an actual currency. The number of nodes on the lighting network is growing fast and it doesn’t look like it’s slowing down.
Lightning network visualisation (explorer.acinq.co)

Wirex in 2019

We are all very excited about 2019 at Wirex. Firstly, our roadmap is full of new features and products, some of which will be world-firsts — we’re sure the community will love them. I can’t reveal what they are right now, but given that our focus is payments and not crypto speculation, you can expect more products that aim to revolutionise the payments landscape. For now, all I can say is stay tuned…

Leave a comment letting me know whether you agree or disagree with my predictions, or if you have something else that you think I should look out for in 2019.