In a problematic forecasting exercise, we have set out solid prospects for the “crypto” sector in 2019.
Here are four perspectives that we felt were solid for the future of the sector.
1. Implementation of regulation
The G20 has decided not to hinder the development of the sector, and several strongholds are emerging. International specialists welcomed the possibility for a start-up wishing to raise funds via cryptocurrencies to apply for a visa from the Financial Market Authority to reassure its investors.
2. Institutional investors now have the right tools
Until now, traditional funds have been reluctant to invest in crypto-assets, for obvious security reasons. In 2018 alone, the equivalent of at least $870 million disappeared from trading platforms. This observation has prompted several specialized companies to develop secure custody solutions, such as Coinbase since July.
Fidelity Investments, one of the world’s largest asset managers (27 million clients and $7,200 billion under management), will launch its solution in 2019, as will the New York Stock Exchange via the future Bakkt platform on January 24. Of note is the presence in Bakkt’s capital of Microsoft Ventures, Naspers Capital (which owns 31% of Tencent) and a partnership with Starbucks. One of the keys to democratization lies in the presence of trusted actors.
3. Multinational companies are working on crypto solutions
Bitcoin and other cryptocurrencies continue to be considered criminal activities. These exaggerated allegations are exaggerated in view of the many official reports published on this subject (3 to 6% of all transactions according to Europol). But it will still take time to twist this preconceived idea.
The salvation may come from the initiatives of large companies that are currently developing cryptomarket-based solutions. Bloomberg reported in mid-December that Facebook was working on a homemade cryptocurrency that would be used to send money to each other via WhatsApp.
4. Bitcoin, a haven for the next financial crisis?
How will Bitcoin behave in the event of a major financial crisis? This question is on everyone’s lips, while many economists are talking about the imminent turbulence (US student loan bubble, rising interest rates, sovereign debt crisis, etc.). Bitcoin appeared in the wake of the market collapse in 2008, surfing in particular on the idea that banks would not be responsible enough to handle their customers’ savings properly.
In 2018, that Bitcoin became an attractive reserve of value in Venezuela, according to statistics from LocalBitcoins, a site that measures Bitcoin use. Local currency inflation is expected to exceed 1,000,000% according to the IMF. Mining initiatives have also taken place in Iran, which is now deprived of access to the international financial system with the restoration of US sanctions. In the event of a new global crisis, the decentralized nature of the Bitcoin protocol could appeal to some actors.