The 2018 cryptocurrency market was the worst in the industry’s history. The crash caused panic among crypto enthusiasts who began the year with high expectations following the 2017 boom. In December 2017, a cryptocurrency like Bitcoin registered an all-time high of about $20, 000. However, within the first week of January 2018, signs of a bear market started showing when Bitcoin traded around the $16, 000 mark. The bear market continued throughout the year with Bitcoin closing the year at $4, 000 a contrast to the 2017 experience.
Following the market performance, many had an interest in knowing what led to the bear market and how will a 2019 cryptocurrency market look like. Here is a look at what transpired in 2018.
1. Massive ICO Emergence
An Initial Coin Offering is basically how startups in the crypto sector are funded. ICOs can be carried out through private venture capital or global lending facilities. One thing to note is that ICOs are very risky. In 2018, more than 1000 ICOs that joined the market were classified as high risk as they did not adhere to regulations. Within the same year, there was an increased crackdown on such ICOs from the SEC. SEC tried to contain the situation by pursuing sanctions and investor refunds for most scammy ICOs.
Previously, SEC was known to warn ICO projects against failure to adhere to laws. SEC started acting when the ICO explosion took the center stage with the aim of protecting investors. Already, more than 90% of ICOs launched in 2018 have collapsed. With such massive failures, consumers were left with a negative impression of the cryptocurrency sector.
2. State Regulations
Cryptocurrencies need regulations from the government. However, such regulations should not have negative effects on the sector. SEC protection is appropriate for ICO investors, however, government protection is different. Many viewed state regulation as an obstacle to spurring innovations in the cryptocurrency sector. Many expect the regulations to support the sector but not limit it. In some cases, governments laid down strict laws that forced many cryptocurrency projects to relocate to friendly countries.
3. Stagnant Blockchain
Without a doubt, blockchain technology is the future. The technology is taking over most industries like finance and real estate. Since its emergence, the blockchain technology has always looked promising with many projects being tested. However, 2018 didn’t see much progress towards adoption of blockchain technology.
Experts believe that the blockchain stagnation in 2018 is due to fear of change. Many people were not sure what to expect after switching to the blockchain technology, especially financial institutions. As a result, many opted to carry out tests before joining the blockchain bandwagon fully.
The Crypto Sector In 2019
2019 is a year of many expectations from cryptocurrency enthusiasts. Top on the agenda is the recovery of the industry after a turbulent 2018. Apart from recovery, here is what you can expect.
1. Cryptocurrencies and the Developing World
Cryptocurrencies have the ability to shake things in developing countries. Over the years, many people have been expecting the technology behind cryptos to help more than two billion people living in poverty. Cryptos are also viewed as the pathway for these people to join the global economy through banks without interference from governments.
However, 2019 will not witness any significant change when it comes to freeing the developing world. We are bound to see major steps towards helping the unbanked population. Although it won’t happen in one year, a rising number of people around the globe are considering crypto as a viable financial alternative to their less than ideal, current financial situation. This realization is set to be acted upon in 2019 but at a slow pace. This trend is set to grow beyond 2019. The gateway to achieving financial freedom will be propelled through a large scale acquisition of smartphones.
Citizens in countries like Venezuela seem to be realizing the benefits of independent financial structures. The country is currently in a deep economic crisis. Venezuelans are now looking at cryptos like Bitcoin as the alternative for the devalued national currency. With cryptocurrencies, we have a financial autonomy in a situation where there is a poor banking system or economic crisis. Furthermore, cryptos help attain financial freedom without interference from the central government.
2. Will Bitcoin Rebound In 2019
In 2018, the cryptocurrency market significantly dropped. Bitcoin crashed by over 80% from the 2017 all-time high. Many are wondering what should we expect from Bitcoin in 2019. Here are what leading industry figures think about Bitcoin’s 2019 prospects.
Elizabeth Stark. The CEO of Lightning Labs is among the existing influential cryptocurrency realists. At the point when many had called to end the crypto crash in 2018, Starks adopted a cautious approach. She pointed out that leading financial institution might be a major obstacle along the way.
Despite raising concerns, Starks through her company has been supporting cryptocurrencies. Lightning Labs uses blockchain technology to offer real-world business applications. She is famous for stating that Bitcoin is a marathon but not a sprint.
Nouriel Roubini. Roubini is popularly known as Dr.Doom after predicting the financial meltdown of 2008. Roubini who is a renowned economist is a heavy cryptocurrency critic. He is on record stating that Bitcoin should be dropped because it is useless. According to the economist, Bitcoin has a hidden purpose. He views the maiden cryptocurrency as a smart financial workaround that will not have any impact since it is destined for the museum.
When Roubini predicts the fall of Bitcoin, some people might take him seriously considering that he once predicted a major global financial meltdown. He also predicted the crypto crash of 2018. These two predictions make him an influential figure in the sector who should not be rubbished.
John McAfee. McAfee believes cryptos have a bright future. According to McAfee, Bitcoin will close the year valued between $50, 000 and $100, 000. He adds that by 2020 Bitcoin will be valued at $500, 000 on its way to hit the $1 million marks.
Bitcoin’s Five-Year Prediction
Other leading cryptocurrency figures have shared their predictions for Bitcoin. A majority believe that in the next five years Bitcoin will hit $10000. Another 15% predict Bitcoin’s value to stand at over $100, 000. On the other hand, 4% see Bitcoin hitting the $1 million mark. This predication pioneered by John McAfee, however, seems unrealistic. On the other, we have pessimists who paint Bitcoin’s future dark. 17% believe Bitcoin will have no value in five years time.
Proceeding into 2019, we expect some factors to positively influence the cryptocurrency sector and rally the mass adoption push. Many crypto fans expect a better investment climate with regulations and institutional partnerships. The most compelling aspect that will increase adoption of digital currencies is the current situation in countries like Venezuela. Many citizens are expected to turn to cryptos and this will be a clear indicator that digital currencies can take over fiat currency. Before reaching this stage, investors need to practice patience for them to get lucrative rewards.
After a rough 2018, the cryptocurrency world is optimistic that the sector will have good returns this year. Experts like Stark are right to call for confidence among crypto lovers. The fact of the matter is that the crypto sector is still maturing. To realize full maturity, we have some obstacles to overcome along the way but nobody can doubt the potential of cryptocurrencies. We hope to see the sector reach its potential soon.
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