9 Cryptocurrency Trends To Guide Your Investment Strategy In 2019
The Bitcoin whitepaper turned 10 years old in 2018, and the revolution it brought has come a long way.
The concept of blockchain being applied to finances has challenged the central banks. Currently, banks control the world economy, and can make it rain money over who they want, where they want, and when they want.
Blockchain and cryptocurrencies are creating a transparent distribution of money with fixed supply, free from the economic manipulation of a few people at the helm of power.
This challenge to the status quo is not expected to be met with grace by the operators of the current system. Everybody wants technological advancement, but also nobody wants to have less power than they had before the advancement came.
This is one of the underlying elements stalling the adoption of cryptocurrencies by traditional financial institutions. In fact, this antagonism helped trigger the crypto industry’s 2018 bear trend.
Some crypto projects were indeed valued beyond the reasonable market valuation during the 2017 bull run. However, the market was caught in a trap when the majority of people buying cryptocurrencies were doing so to profit in fiat.
The 2018 downtrend has shaken a lot of people out of the market. Some people have used the opportunity to get smarter and 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.
Before we see the trends that looks promising for 2019, let’s consider the trends we all expected in 2018, and the reality that resulted.
Takeaways From 2018 Trends: Our Predictions and Reality
Our article from early 2018 spelled out trends that we thought would develop over the course of the year. And while none of us were prepared for just how intense this bear market would be, it is interesting to look back at where we thought crypto was headed.
The first trend mentioned was about dapp platforms. We witnessed the mainnet launch of some of the blockchain platforms with the potential to be “Ethereum killers,” such as Tron and EOS. The prediction emphasized that it is still too early for dapps to succeed, and in fact many of them will fail, but the underlying platforms will continue to pull through.
Interestingly, while we predicted ETH, NEO, and EOS as being active dapp platforms in 2018, the dynamic progress seen with the Tron mainnet, resulting in dapps migrating to Tron from Ethereum, has snuck in on us from the sides.
The second trend was the ICO craze, which had a fascinating trajectory over the course of the year.
ICOs cooled off, particularly in the second half of the year, due to regulations from government agencies such as the SEC and CFTC. These regulations are aimed at protecting investors from fraud, but make things difficult for many crypto projects.
The dominance of Ethereum (as a dapp platform) for most of the year and the pushback by regulators was predicted, with 70% of all ICOs being launched on Ethereum which led to the spike in ETH price.
Also predicted was the rise of ICOs on other platforms, as well as the necessity to look to other means of fundraising, such as the pre-ICO.
The third trend is the scalability debate, which continued to make a splash in 2018.
With the bear market, questions began to pop up as to whether these crypto projects are capable of what they claim. As predicted, the Lightning Network got the spotlight, growing at a significant pace.
Other blockchains are also unveiling their plans to scale, including sharding and the Constantinople upgrade for Ethereum.
Security Token Offerings
The fourth trend about security tokens hasn’t really taken off because regulatory compliance has taken much more time than expected.
Instead, we’ve seen stablecoins stealing the show as the price volatility made people long for cryptocurrencies with a stable value.
Ease of Purchasing Digital Assets
The fifth trend predicted was that the purchase of digital assets would become significantly easier.
This has indeed happened over the course of 2018, with platforms such as Cashapp enabling people to purchase bitcoins and even the “conservative” Coinbase adding cryptocurrencies like 0x and BAT to their exchange, with plans to add even more.
Also, some institutional investors have come into the OTC market, and there are more financial products attached to Bitcoin (such as Bitcoin Futures) unlike before.
9 Cryptocurrency Trend Predictions for 2019
Generally, the market has been really slow in 2018.
Bitcoin, known to be really volatile, demonstrated some periods of flatness over the course of 2018, in which the price of Bitcoin barely changed over 12 hours or more.
The downtrend in the market also hindered adoption, as there was a great deal of bitterness towards cryptocurrencies from people who experienced severe losses.
There isn’t a clear cause of this latest bear trend that has hit the market, which makes it hard to predict what will bring the market back.
Knowing this, it is important to consider a few trends that might gain traction in the year 2019.
Trend #1: Crypto Margin Trading Trend Will Subside
The trend of crypto trading has already suffered a blow in this 2018 bear market, with a lot of people losing lots of money.Some traders kept their gains in Bitcoin, forgetting that Bitcoin itself is subject to a drop in price, leaving many with only a fraction of the value that they bought in for.
Moreover, many of those who did cash out had to pay income tax on their gains, leaving them wondering why they bothered to invest in the first place.
This has greatly discouraged the trading trend.
However, this doesn’t mean an end to crypto trading. Some will keep trading, having become wiser from the market’s fluctuations; others will relegate trading to when it is absolutely necessary.
This will result in a stiff competition among crypto exchanges as they try to capture a significant chunk of the market.
The usual trade volume from crypto-to-fiat and fiat-to-crypto exchanges may experience an uptick, but crypto-to-crypto exchanges are unlikely to experience any rise in volume and may suffer lower trade volumes for the most part of the year.
If institutional investors (such as the contemporaries of Yale, which has already invested in the crypto industry) come into play over the course of 2019, they will certainly not be keeping their gains in crypto.
Hence, it is highly unlikely that they will trade or invest in any coin that does not trade directly with fiat.
Trend #2: Price Volatility Will Be Low
Bitcoin experienced serious price volatility in 2017 that affected the whole crypto industry.
In 2018, the price volatility has been more subtle. Price changes over short periods of time have not been significant. There were moments where there were big price changes within 24 hours, but they were quite few.
This trend looks to be positioned to continue into 2019, as we will likely see more price stability in the crypto world than we have in previous years.
This is a good sign for institutional investors as they are more comfortable with steady growth as compared to rapid fluctuations. Also, this is also good for user adoption, which is really the backbone of the growth of the industry.
Trend #3: More Institutional Investors Will Come in Slowly Throughout the Year
Institutional investors are more careful not to lose money than they are eager to make money. Most of them take due diligence very seriously and are very gradual and cautious in their approach to investing.
Just like Anthony Pompliano, CEO of Morgan Creek tweeted:
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