By Arseny Bessmertnykh, analyst at Zichain
Undoubtedly, 2018 will go down in history as a turning point in the development of the blockchain industry and the cryptocurrency market. Now is the time to think what the foreseeable future might be holding in store for us. Overall in 2019, we expect a growth in prices, arising not from speculative trends, but from a number of fundamental factors.
We are already seeing financial regulators around the world change their positions on digital assets. While in previous years, most legislative initiatives in this area were restrictive, in the past six months, governments have increasingly supported the introduction of blockchain and cryptocurrency development. In 2019, relations between the regulators and the blockchain industry will continue to develop in the same paradigm. The US Securities and Exchange Commission’s approval of a cryptocurrency ETF at the end of February 2019 will probably be the most important event. Even if a positive decision is not made, its process already indicates a change in the regulatory approach: the Commission has been in a constructive dialogue with industry representatives for several months to understand all the details and make the most balanced decision.
The year 2019 will be noted for the institutionalization of the cryptocurrency market. The world’s largest financial institutions have already announced plans to create trading infrastructure for digital assets. For example, Fidelity Investments and the ICE Exchange have announced plans to launch their own trading platforms, and NASDAQ plans to start futures trading on BTC. While private investors are panicking and leaving the market, leading financial institutions are confidently announcing their new cryptocurrency projects. The inflow of institutional investors may become one of the main drivers of the market growth in 2019. It will create numerous opportunities for all market participants and will upset those in the cryptocurrency society who considered these assets as the best way to get rid of the control of the banking system.
Finally, another important trend in 2019 will be the development of the security token market, that is, digital assets that fully comply with legislative and regulatory requirements, which makes them a kind of private placement. Security token offerings (STO) will provide a comprehensive defense of investors’ rights, which is especially important given numerous cases of ICO fraud. At the same time, security tokens can potentially open the access to the market not only for blockchain projects, but also for a large circle of other companies that will be able to cut the expenses as compared with the traditional placement.
It may be concluded that in 2019 a new stage of the cryptocurrency market development will begin, which will be noted for the professionalization process, a positive legislative and regulatory agenda, as well as the convergence of the digital assets world and the world of traditional finance.