The cryptocurrency industry in 2018 has been stuck in a bear run,and bitcoin is the perfect example to explain it. In the first quarter of 2018,Bitcoin was trading at close to $13,500 which was a sharp drop from the all-time high trading price of $19,783.06 as at December 2017. By the time of writing this article, Bitcoin had lost as much as three quarters of its value to sell for $3,400. This turn of events is not unique to Bitcoin alone; other digital assets are not fairing any better either.
Ethereum, the second most popular cryptocurrency shed $1209 to sell at $91 in 2018 after recording an all-time high selling price of $1300 recorded on December 17, 2018. These digital currencies are not only losing the fight on the valuation front, and according to Investopedia, over the past few months individual investors are losing interest in the cryptocurrency market. There was a multitude of investors who were keen on making huge profits during the ‘cryptocurrency craze’, and the long running bear market have dashed their hopes, forcing them to make exit moves.
With that said, all is not lost for the cryptocurrency industry.There have been increased institutional interest in digital currencies in the last few months of 2018, and in 2019, the big question will be how the industry will adapt to the changing investor landscape. Here are a few things to consider.
Institutional Investors Will Change the Game
While individual investors are exiting the market, institutional investors are getting into the game. Despite this, the industry will see fewer transactions, but the trading volumes from the institutional investors will be enough to sustain the industry. Currently, there are several potential development projects that when actualized in 2019, institutional investments in the industry will soar. Should digital assets get floated in markets such as the Nasdaq, the industry would become more attractive, and record increased value.
Approval of A Bitcoin ETF
The SEC has on several occasions pushed back or rejected bitcoin ETF applications despite cryptocurrency enthusiasts pinning for a digital currency ETF to be made available to investors in the US. One of the most popular funds provided by VanEck final approval decision has been pushed back to February 2019.
Many analysts believe that should the SEC approve at least one mainstream bitcoin ETF; then the industry could see increased investor confidence since they can participate in token trading directly without the associated risks facing the industry today.
Stablecoins Will Take the Lead Position
Stable coins are tokens linked to a fiat currency that act as a hedging mechanism against the decline of the underlying digital currency collateral prices. Analysts give two reasons for the growth of stable coins in 2019; one, tether, the leading stable coin in the industry is set to be dethroned, this is due to its highly-publicized growing pains which have seen new players enter the market to compete with tether for dominance. Second, the result of a long-time instability of decentralized tokens will see investors preferring stable coins to the decentralized digital assets.
What Is Sure About the Industry in 2019
It is difficult to pinpoint the cryptocurrencies that will see a significant gain in value come 2019, but the industry investors are still confident that a bullish market will emerge. The underlying technology behind the cryptocurrency industry, blockchain, has spread to other sectors and we can expect a diverse range of new applications in 2019.
Since cryptocurrency’s initial agenda was to revolutionize the financial sector, it is certain that there will be several fans of the industry who are bent on seeing the revolution through. Governments and regulators will continue to grapple on how to control the industry but the players are opening up to negotiations.
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