2018 was a bad year for those in the virtual currency market.
With Bitcoin losing more than 80% of its value, there were discussions about whether people would continue to deal in virtual currencies or jump out altogether.
After all, the market was in a situation where people were buying cryptocurrencies and profiting off fiat money, not because there was a physical commodity backing it.
And anyone that understands how money works knows this is bad news.
That said, experts argue that cryptocurrencies are very different from fiat money and that while 2019 predictions will be a little more reserved than last year’s, there are a lot of exciting things to look forward to.
Let’s take a look.
1. Increased Regulation
While Initial Coin Offerings (ICOs) were making their mark last year, regulatory agencies started getting involved to create a clear regulatory framework for those investing in cryptocurrencies.
Because of this, you can expect that trend to continue this year.
For instance, the U.S. Securities and Exchange Commission (SEC) will likely play an important role in the virtual currency market.
Investigating illegal securities offerings and scammers in the ICO market, the SEC will most likely clarify how to raise funds and operate in the virtual currency space legally.
2. Stable Coins
The ideal cryptocurrency should have price stability, scalability, privacy, and decentralization.
Though stable coins were supposed to be a big hit last year, many people agree that 2019 is the year for them to shine.
Backed by a stable asset such as gold or the U.S. dollar, stable coins give people a global currency they can use that’s not tied to a central bank and has low volatility.
The problem with coins like Bitcoin and Ethereum is that they are highly unstable, even though they’re popular. This Bitcoin price chart analysis can help you get a better grasp of the Bitcoin landscape and how it progresses.
In fact, it’s not unusual to see coins like that increase or decrease in value by as much as 10-20% on any given day.
That makes them extremely inconvenient for everyday purchases like buying coffee, groceries, or even gas.
You might pay $5 today and see that the same thing costs only $4 tomorrow.
Price instability and fluctuations are the reason stable coins are not only trending this year but are necessary for the survival of the virtual currency market.
3. The Rise of Security Tokens (Maybe?)
If you follow the latest cryptocurrency news, you know that last year was supposed to be the year of the security token.
And while most trends in any industry that fall flat one year don’t roll over into the next, you can expect security tokens to be one of those trends that stick around.
Security tokens can have many purposes.
But when it comes to cryptocurrency, security tokens are used as a form of investment contract whereby one party anticipates actual profit to generate from a business transaction.
In other words, security tokens are for:
- Investing money
- Pooling investors’ money and assets to invest in an up-and-coming project
- Establishing an expectation of profit from the project
Some people compare security tokens to investing in company shares.
Though you technically own a portion of the company you invest in, you don’t actually own the business. But you do expect a profit.
As 2019 rolls out more regulatory rules regarding cryptocurrency, you can expect security tokens to make a comeback to protect against fraud.
4. Cryptocurrency Exchanges
Despite last year’s troubles (and a whole lot of lost money), cryptocurrency exchanges are still a favorite among investors.
And because of this, some of the best cryptocurrency exchanges continue to thrive.
Designed as a platform for buying, selling, and exchanging virtual currency, cryptocurrency exchanges can be divided into two distinct groups:
- Fiat Exchange: a trading platform for people to buy cryptocurrencies using traditional, government-issued currencies such as the US dollar or euro.
- Cryptocurrency to Cryptocurrency Exchanges (C2C): a platform that enables trading between parties only using cryptocurrency. This works well for those looking to exchange one type of cryptocurrency for another.
Each platform will differ when it comes to terms and conditions, policies, payment methods, and fees.
And since last year hurt a lot of people financially, you should expect exchanges to go above and beyond to acquire or retain those investing.
Other factors that may affect which exchange you go with include security measures, user-friendliness and experience, functionality, and even design.
Because of this, you should treat all exchanges with the same seriousness you would making any investment.
5. No Massive Bull Runs
Cryptocurrency hasn’t quite recovered from the bear market. In fact, many have underestimated just how low Bitcoin can go.
And until the prices start to rise again, without falling shortly after, the bear market cannot be considered over.
Unfortunately, many people hurting financially from such steep price drops hope that as the bear market comes to an end, the bull runs will start right away so they can recover.
But this just isn’t going to be the case.
At least not in 2019.
The famous saying on Wall Street goes, “the bear jumps out of the window, but the bull climbs the stairs.”
In other words, bear markets are sudden, and bull runs are slow and gradual.
For example, the bull run experienced in 2017, as profitable as it was, can be attributed to many years of “climbing the stairs.”
So, don’t expect anything massive to happen this year in terms of recovery.
Maintain patience and wait it out, just as investors have done for years.
In the end, 2019 will be a year of rebuilding for cryptocurrencies.
Trust in the market needs to be earned back after devastating losses and people need to feel excited about virtual currency markets once again.
But that takes time. And people want to see real results before they jump in again and risk their hard-earned cash.
So, take low prices for what they are and make the most of them so when the market goes up again, you’re reaping the reward.
And remember, so long as there’s development happening the virtual currency space, you can almost guarantee that it’s not over just yet.