Analysis: What 2019 Could Bring for Bitcoin

Trading in altcoins was a big part of what made Bitcoin price spike towards the end of 2017. A section of the crypto space argues that while altcoins helped Bitcoin’s market cap swell, they also brought it down since many people diversified into these alternative currencies at high prices and had to cash out at some point.

Nevertheless, such a situation is not likely to repeat itself very soon due to regulators’ increased interest in the market. For example, the U.S. Department of Justice and the U.S. Commodity Futures Trading Commission this month started investigating cryptocurrency market price manipulation which has led to cryptocurrency sell-off. Also, from Hong Kong to The Phillipines and even Kenya, crypto-related regulations have also started popping up globally albeit at a slow pace.

Also, several other factors that have emerged with time include lack of general trust in blockchain despite more infrastructures are being built than new followers; the fact that the most hyped top 100 crypto projects based on market cap have less users than expected; and the belief that not many new people are investing in cryptocurrencies.

The year is almost out and there are projections for 2019 as more enthusiasts look out for what the new year would bring. While still counting on institutional investors’ support to boost adoption, Bitcoin’s price fell by more than $500 last week from $5300 shortly after Bakkt announced they are postponing the launch of their platform to late January 2019. It has since continued to fall – now at ~$3500 which some suggest to be a good entry point for big players. While this could be true, it sures exposes the fragile nature of crypto markets and gives more reasons for potential investors to stay on the side line.

CEO Kelly Loeffler shares a launch date update and answers other frequently asked questions

— Bakkt (@Bakkt) November 20, 2018

Beneath all this lies the fact that 2018 has so far been more about cooling down the market particularly with the number of initial coin offerings (ICOs) being conducted already cut down and regulatory processes initiated in different parts of the world. The US Securities and Exchange Commission even prosecuted some individuals for their involvement in ICOs that had controversial cloud over them.

The year saw a major expected bubble burst after 2017 brought about less credible investors. Yet, the mode of approach to cryptocurrencies has gradually changed with reputable names such as Harvard and Yale – David Swenson, who manages Yale University’s $29.4 billion endowment made their first cryptocurrency-related investments – associating with them. Some government and public leaders also had healthy and honest conversations about them while international organizations such as UNICEF did not shy away from cryptocurrencies’ potential to revolutionize the charity sector.

What could 2019 bring for Bitcoin?
Next year would be the best to fully understand what institutional investors have to offer – if at all – for Bitcoin and cryptocurrencies in general. The demand for trust in the space, which has already kickstarted, would likely continue even as the more stable volatility level its market has seen in the end part of this year gets carried over.

Some crypto projects would reach maturation with their products being presented for real world use as a main lesson from what the space had to struggled with this year. Looking at the market from this perspective, it is not misleading to assume that the recent drop has to happen because of unreal valuations of certain crypto projects. This is to help flesh out genuine projects with valuable business plan and token utility. The confidence level in credible projects will rise by 2019 and they are likely to regain more investment from true believers.

This conscientous effort on the part of these projects would help support the alternative view that adoption would have to come from within the crypto ecosystem if institutional investors do not deliver with their support. Or both avenues would be pursued to maximize output which will contribute to adoption take-off and help change the narrative that the primary driving force for being in crypto is to make quick money. Investors would henceforth buy any crypto asset for the value it would gain in years to come rather than based on speculation.

Of course, Bitcoin would still maintain its top notch position as the main currency through which investments would be made into other digital assets. Its recognition would aid its growth even as the market continues to absorb its daily production of 1800 new coins until the next block reward halving cuts the supply in two.

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