There’s no denying it – 2018 was a rough year for crypto in many respects. Despite the incredible leaps forward made in the technology, much of the mainstream media coverage focused on the price action of Bitcoin only, detailing the dramatic crash from an ATH of around $20,000 to under $4,000 today.
With Bitcoin market dominance still firm, meaning downward activity in the price of Bitcoin negatively affects most/all altcoins as well, the market correction which has been ongoing for a year now is being dubbed Crypto Winter. Can we expect that to continue?
While it’s anyone’s guess, some guesses are more educated than others, and many market analysts believe that the market is reaching a bottom, despite the negative media coverage. Let’s take a look at some of the major events that are influencing or will influence the market.
ETFs on The Way
One way or another, exchange-traded Bitcoin funds are on the way. Many traders choose not to invest directly in cryptocurrency due to an unfamiliarity or unwillingness to deal with things like cryptographic keys and wallets, exchanges with KYC (many of which have, of course, been hacked, deterring newcomers), lack of custodial insurance, and similarly intimidating aspects of crypto which set it apart from other markets.
Of course, people still wanted to get in on the lucrative and volatile price action – futures allowed people to speculate on the price movement without actually owning any cryptocurrency, and these bets had little to no impact on the market. ETFs change all that – traders can still choose to avoid the scary aspects of crypto by investing through an exchange traded fund which takes their bets and purchases an equivalent amount of cryptocurrency.
The funds are insured, protecting all parties, and there’s no need to go through KYC or learn about wallets, keys, etc. It’s estimated, even by critics such as Andreas Antonopoulos, that ETFs will bring a huge new wave of investors to the space and significantly increase the market cap.
We wrote recently about Bakkt, the forerunner in the ETF hopefuls which looks set to start doing business this year.
Above is a chart showing the continued rise of the installation of Bitcoin ATMs, with the strongest growth barrelling right on through the famous 2018 price crash and showing little signs of stopping.
ATMs are just one way of measuring the ongoing growth. Here’s a map of venues around the world that accept Bitcoin as a form of tender:
The Lightning Network is bigger than ever. More people are trading crypto than ever. More people have heard of crypto than ever, with mainstream news coverage kicking off in earnest sometime in 2017 and bringing us to today where cryptocurrency price action is regularly covered by major financial outlets like Forbes, Bloomberg, and CNBC on a weekly basis.
Does it even sound possible that the so-called Crypto Winter will continue with all this heightened activity? While the price of Bitcoin is down from last year, its growth is exactly in line with the cyclical activity that has trended since its launch in 2008, leading many economists to assert that its gathering strength for another bull run. Whether that will come to pass in 2019 or not is unclear, but to many it’s simply a matter of time one way or another.
Jesse Powell, CEO of Kraken: "Once decentralized exchanges are in place all the regulation will be void" @ErikVoorhees @ShapeShift_io @krakenfx @jespow #Consensus2018 #BlockchainWeekNY #BlockchainWeekNYC
— The Billion Dollar Secret (@BillionairePal) May 15, 2018
Cryptocurrency is no longer the wild west environment seen in 2017/2018 when ICO mania raised billions of dollars and burned countless investors with dodgy projects that didn’t deliver. Regulators in the US and abroad have cracked down majorly on ICOs and exchanges alike in an effort to protect consumers and control the cryptocurrency movement which was in part launched to disempower world governments and regulators.
Regulation is a touchy subject in the crypto space. Many hard-liners feel that any government incursion whatsoever is unwarranted and to be battled at all cost, upholding cryptocurrency as a bastion of libertarian ideals and financial independence.
On the other hand, there are many who see regulation as a necessary step to make crypto more appealing to the masses who could benefit from instant, free, peer-to-peer tranfers of money but don’t want to participate in a space with no consumer protection or safeguards.
Regardless of your stance on it, regulation is on the rise, and while many prominent figures in the space such as ShapeShift CTO Jon and Kraken CEO Jesse Powell have spoken out against regulation, it’s also the case that more regulation positions more cryptocurrency to allow entry to more investors, growing the market cap and continuing the meteoric growth seen since the launch of Bitcoin.
It’s equally true that not all cryptocurrencies will fall under regulation, and that there’s little that can be done to stop them. Private, anonymous currencies like Monero most likely terrify government regulators, but seeing as they can be exchanged on decentralized exchanges for regulated assets and exchanged for fiat, they prove very difficult to ban outright.
Summer Is Coming
Bitcoin is even more compelling today than it was at the beginning of the year.
Can’t wait to see how epic 2019 will be!
— Pomp ? (@APompliano) January 1, 2019
With such extensive activity in the space, it seems like 2019 is going to be a truly massive year for cryptocurrency. It’s too soon to say whether anyone’s bags will be getting lighter in the coming months, but this year looks set to be one of the most eventful periods in the short and colorful history of this emerging technology which grows more and more interesting as time goes on.