2019: What’s in Store for Digital Assets?

[Ozark]

Market activity, projects and types of coins and tokens may see a very different year, rethinking some of the principles taken for granted.

Late 2018 brought an ominous downturn on the stock markets that affected indices worldwide. Analysts are already talking of a bear market in stocks. Added to this are signs that central banks would continue raising interest rates in 2019.

Regulatory pressures, on both exchanges and tokenization projects, made the market even more complicated, as trading and fundraising was no longer seen as a free-for-all activity. While the digital asset markets remain less tightly regulated than legacy finance, there are signs of tightening coming in the future.

Cryptovest contacted analysts about other developments expected in 2019.

Usable technology is key, as stated by Marshall Hayner, CEO of Metal:

“I believe tokens that have utility, and are generally considered to be decentralized cryptocurrencies, will live on. However, tokens that existed solely for a funding event, and have no useful purpose, will most likely disappear or become security tokens trading on licensed platforms. The cryptocurrencies that will come out on top will be the ones with the most usable real-world value.”

Others are less optimistic:

“I don’t think that this is the end of a bear trend. At least not yet. As a result of a steady decline in the crypto markets, many blockchain startups have been cutting down their activity or even leaving the market entirely. We’ve seen that many blockchain developers are looking for jobs now — this was not the case a few months ago. Startups liquidating their positions in crypto to survive will continue for some time, as will the bear market,” said Andrey Alekhin, CEO of blockchain art laboratory Snark.art.

Crypto assets are here to stay, although confusion and volatility may remain for 2019, predicts Misha Libman, Co-founder of Snark.art:

“Ultimately we are dealing with a new technology and new asset that is highly speculative, illiquid, and elusive, and drivers for its rise and fall is anyone's guess and can be attributed by the media to anything from Federal Reserve's interest rate hikes to SEC regulations to market fever.  But without a doubt I believe that blockchain and cryptocurrencies have a place in our future and the roller coaster volatility that we are seeing today is something we are going to have to live with for a while until we will start using crypto to buy chewing gum.”

Toward the end of 2018, individual assets were rallying from their lows, showing that the markets still had the energy to pull off a rally. Bitcoin reached $4,253.34, and easily climbing to a higher price range within hours on December 24. But the current movement may also be a brief moment that invites caution. Mati Greenspan, Senior Market Analyst at eToro, commented:

“For those wondering why we're seeing this awesome push from the floor, the only explanation I can give is that this rally is all about short covering. Especially after the short squeeze, we saw on Monday, yesterday’s action is simply a continuation of that. Markets are made of people and it's likely that most people will be looking to reduce their exposure before the holidays. Over the last few weeks, there have been a lot of high leveraged short positions building up and when those sell positions are closed, it creates upward pressure on market prices.”

The new year, however, may bring extend the bear market, as more capitulation events are not out of the question. The influence of stablecoins is yet to be felt, although Tether (USDT) has shown its dominance over the market, and still makes up a large percentage of Bitcoin trades.

ICO-funded startups will have to prove their mettle and at least show that they aren’t a scam by showing a path to some type of viable product or service.

Exchanges, which were subject to an increasing number of hacks and attacks in 2018, are fighting to increase security and screen their customers better, including exchanges seen previously as freely accessible, like Binance, and even decentralized exchanges.

Individual coins and tokens will go through potential milestones. Bitcoin Cash (BCH) is looking at recovery and widespread adoption, while Ethereum (ETH) is scheduled to transform into a proof-of-stake coin with the Casper update.

Institutional investment, as well as the launch of an ETF, may continue to be delayed, based on skepticism, at least until the value of digital assets and real-life use cases prove themselves.

In 2019, the infrastructure for trading security tokens will continue to develop, showing the real-world performance of this type of asset. The next year will show if tokenizing securities is a big opportunity, or if the growth would be tentative.

2019 will be a year when a lot of developments in the pipeline will become visible and steer the direction of digital asset projects and markets. While compared to the hot days of early 2018, the new year may look like “crypto winter”, the building of solutions will not stop, although the improvements would arrive with much less hype.

SOURCE