Last year was rather turbulent for the crypto community, with prices plummeting over 80% from the peak, and many people expecting ‘the bubble’ to burst. As for the year 2019, it may be seen a period of stabilization. In this article, we would like to review the basic trends shaping the crypto profile of 2019. Being aware of what is really happening with crypto on the global scale is important for those seeking to improve their investment strategy and make smarter choices.
In my point of view, these big crypto trends are:
The growing popularity of stablecoins
Volatility has always been seen as an inherent feature of cryptocurrencies: most of us remember the BTC’s price roller-coaster that made some people rich and encouraged others to invest in crypto projects in hope for fast multiple returns. Now this ‘gambling’ tendency is decreasing, people opting for stability and predictability. This focus shift explains the growing interest for stablecoins – the cryptocurrencies that are meant to be non-volatile, their price is pegged to one of the fiat currencies or exchange-traded commodities. Stablecoin is a good method ‘to freeze’ the value of the underlying cryptocurrency, protecting yourself from a probable price decline. Thus, it allows you to enjoy all the benefits of digital money, eliminating one of the major risks it presents. Stablecoins serve as a kind of bridge between tradition and innovation, helping to involve people and organizations who cannot afford to deal with volatile coins but are ready to opt for something ‘more serious’, bound to a conventional asset.
Security tokens rather than utility tokens
This trend is rooted in the same public demand for stability, and signals that the market is getting mature and more stable. The time of ICOs (Initial Coin Offerings) that mushroomed in 2017 and were, for the most part, a great disappointment for their investors (actually, over 80% of the ICOs conducted in 2017 were later identified as scams), is almost over.
Instead, STOs (Security Coin Offerings) are gaining momentum, giving investors a chance to acquire a share of the company’s assets. Security Token Offerings, in accordance with their name, is a more reliable way to invest, as they tend to comply with the regulations, leaving less space for manipulation and fraud. This trend ushers the arrival of serious investors and serious blockchain projects, introducing really useful and well-developed solutions, worthy to receive a massive financial support. With time, it may help bleaching the reputation of crypto, tainted by failed or scam projects.
Currently, numerous STOs are held in Malta, Singapore and other crypto regulatory sandboxes, and it seems that this model will finally replace ICOs.
Banks showing interest in the blockchain technology
The first thing that comes to mind when we talk about blockchain solutions for banks is Ripple (XRP) – a coin, targeted at facilitating and streamlining international bank transfers. Also, there has been some hot news about major banks showing apparent interest in the technology and hiring blockchain developers. For instance, JPMorgan created their own coin – in contradiction with the utterly negative stance expressed earlier. There are other financial giants looking in the same direction, like Goldman Sach, Santander, Citibank and Bank of America.
It may sound weird: banks are centralized organizations by nature, and as such are expected to be opposed to the decentralized blockchain technology, capable of disrupting their power. At a closer look, banks are just trying to adapt to the changing financial landscape and apply blockchain solutions for improving their services. For example, for speeding up the processes, connected with verification.
Actually, it might be possible for banks to benefit from the technology and even create their own cryptocurrencies without affecting their centralized structure, though currently the process is impeded by the unclear or inconsistent regulation of the crypto sector.
Increased public awareness
Though cryptocurrency has been on everyone’s lips for quite a while, being associated mostly with a get-rich-fast scheme, a mainstream user lacked understanding of it. Many people saw the innovation as a speculation tool for tech-savvies, and could not even tell the difference between Blockchain and Bitcoin.
Now the situation is starting to change for the better, as more educational resources appear, making things easier for a beginner. Crypto-related activities like trading are becoming more accessible and user-friendly.
Some well-reputed educational institutions start introducing digital currencies courses in their curriculum, thus contributing to a more positive vision of crypto.
There are numerous websites and podcasts, where the industry experts and enthusiasts share life-hacks to make dealing with crypto more secure and convenient for a newbie. Step by step, their combined educational efforts are bearing fruit: the public starts to warm up towards crypto, previously seen as a bubble or a criminal tool.
Blockchain solutions for anything
Recently, we have been witnessing a growing interest for blockchain solutions from beyond the financial sector. Various industries seek to implement the technology for making their work more transparent, fair, fast and convenient – both for users and service providers. Different projects appear, aimed at reducing carbon footprint, improving drugs supply chain, fighting against blood diamonds, preventing insurance frauds, optimizing personal data management, promoting healthy lifestyle, voting, dating and fundraising for charities.
It looks like every sector has the potential to become better due to blockchain integration, as their problems are pretty similar.
In conclusion, cryptocurrency ‘gold rush’ seems to be almost over, the innovation entering an age when it stops being a tool for risk-takers and starts being integrated into the very tissue of society.
As always, there are many factors that influence the speed and the scope of the technology adoption, but definitely, it has passed a long way and it’s here to stay.