2018 has been a long, eventful year for crypto and while prices have dropped significantly since the start of the year, there have been strides made in the company building side that give hope for 2019.
As we head into the new year, one of the most common questions I get asked is what I see upcoming for the next year. While I don’t like predicting crypto price, I think it would be fun to think about a few upcoming trends and see if they shake out in the next year.
Enjoy and Happy New Year to everyone! To a great 2019 for crypto!
Crypto Predictions for 2019
- This year we’ve already seen two of the largest acquisitions in the space with Bitstamp getting acquired
by NXMH and Chain getting acquired
by Stellar in addition to others like Earn
. Coinbase hired Emilie Choi
to head up BD and corporate development and other established crypto companies are looking at both investing into early stage startups or acquiring. Traditional tech startups are even spending more resources on figuring out their blockchain strategy, as Facebook has hired more employees for its blockchain team
and is rumored to be developing a stablecoin
for payments in Whatsapp. In 2019, I see a ramp-up in acquisitions by established players like Coinbase, Circle, and Bitmain but also a major significant acquisition by a traditional tech giant.
- Security tokens have been one of the hottest topics of the year. With regulations becoming more of a focus, projects are treating their tokens as if they are securities. As infrastructure is being built for institutions to speculate on non-security tokens, there is a belief that they are more likely to speculate on security tokens, asset-backed tokens that could represent ownership/profits in art, REITs, funds, etc. Recently, Harbor, launched the first institutional-grade security token offering
by offering an investment opportunity into a student housing real-estate property owned by DRW. In 2019, I think that STOs (security-token offerings) will gain traction through issuance platforms but will fail to meet expectations in becoming a largely traded asset class as it will take some time for this sector to take off due to education, regulation, and infrastructure.
Death of ICOs
- Over $20B has been raised using initial coin offerings in the past 2 years, and we are likely to see a high-percentage of them fail due to not being able to execute because of regulations and/or operational capital. The latter reason could be attributed to the project not actually needing a token, mismanagement of treasury, or just not being able to achieve product-market fit. Recently, we’ve seen Basis shutdown due to regulatory hurdles
. In 2019, I think that a lot of the ICOs that came to market early or in early 2018 will shut down and some of those will be very high-profile.
- This year we’ve seen some pretty sizable and high profile funding rounds for infrastructure that will help onboard institutional investors into the space. On the custodian side, Bakkt
, and Bitgo
have raised rounds. On the trading execution side, Omniex
, and Lumina
have raised rounds. In 2019, while the infrastructure is being built, it will take some more time for institutions to get comfortable around risk and regulations and therefore 2019 won’t be the year that they come in a big way.
Scalability - This year, we’ve seen a ton of projects focused on scalability and most of the capital into tokens this year by Pantera has been surrounding projects tackling this. Coda, Algorand, Dfinity, Thunder, Oasis, etc have raised significant rounds on the Layer 1 side. Celer, Lightning, and Bloxroute have raised significant rounds on the Layer 2 side. In 2019, I believe we’ll see launches of most of these scalability projects and at least one of them to get gain solid traction to compete as a next-level platform for smart contracts.