Almost a decade ago, the financial world saw a rise of a giant in the form of bitcoin after a global economic crash that took the markets by storm. With trust lost in the traditional fiat system, people looked out for an alternative in the form of digital currencies, specifically cryptocurrencies. This was the time when bitcoin rose to prominence.
In the first few years, the trust shown by the public in it could not develop to a greater extent owing to everything being digitalized with no physical presence. Just like every technological innovation takes time to get its acceptance among the public, so did bitcoin.
2013 was the year when bitcoin started to touch the mighty mark of $1,000. But then again as Mt. Gox, a Japanese bitcoin exchange that handled almost 70% of bitcoin transactions, fell victim to a massive hack resulting in a large number of missing bitcoins from the network. This marred the reputation of the bitcoin arena to a very large extent and the prices again became low for the next few years with no signs of improvement.
With all this happening, bitcoin also became one of the major channels to perform illegal activities by criminals. As it is based on blockchain technology, the cases of money-laundering started to arise because every operation on a blockchain network is anonymous. It also became a source of payment in the notorious ‘Dark Web’, a place where all illegal activities found a way to percolate without any supervision from the third-parties. There is no regulatory framework in charge that manages what happens. Only the data regarding transactions is maintained on the network, the remaining, nobody knows. A transparent but anonymous framework of operations, whether legal or illegal.
In 2017, bitcoin took off to a massive extent as it almost touched the mark of $20,000 in December of 2017. 2018 didn’t prove to be as significant for the coin in terms of price bull runs, but a lot of developments were made that shifted the tide of the relatively negative image of bitcoin towards the positive side. Proposals for exchange-traded funds (ETF) were presented forward by major firms so that the asset can be given a proper place in the financial market drawing major institutions towards it. So, where are we headed from here on?
The general trust among the public regarding cryptocurrencies is slowly increasing as more and more blockchain-based platform are springing up presenting forward strong use-cases OF digital currencies in everyday life. Bitcoin has been the most prominent among all the other cryptocurrencies floating around. It is the biggest cryptocurrency in terms of market capitalization as of yet. So regarding bitcoin, the following things are there to look out for in 2019.
Exchange-Traded Fund (ETF)
The suggestion made by various experts of the crypto game that a crypto-linked exchange-traded fund will get approved in 2018 has not come true as of yet. And with the pace shown by the United States Securities and Exchange Commission (SEC) regarding the ETF approval, it seems highly unlikely we will see it happening this year.
So 2019 might just prove to be the year in which we see a bitcoin ETF get established. Proposals are constantly being presented forward to the SEC. The concerns that were raised by the SEC in the form of valuation, custody, arbitrage, liquidity, manipulation and other risks associated with the market were also addressed by VanEck, a firm which also presented forward its ETF proposal in partnership with SolidX.
Up until now, the SEC has either denied the proposals or has postponed its decisions regarding this matter. But the tide is starting to shift now. People inside SEC, such as Hester M. Peirce, who is a commissioner at the SEC, are now looking towards giving the crypto market the space it requires. As the institutional and the public drive increases, it is not very likely that the SEC will hold on from approving a bitcoin ETF for too long.
2018 didn’t see a price spike as seen in 2017. But with an ETF approval in probable sight, we might see a sudden price spike in the price of bitcoin. As of now, the institutions are holding back from entering this space. But once an ETF gets established, a large inflow of institutional money that is sitting on the sidelines is expected. It will also increase the general adoption of bitcoin in the public as people will now have an easy path of access to bitcoin, which was previously considered ‘dirty’. This is expected to increase the price of bitcoin by a huge chunk, but then again, it all hinges on the ETF. Besides, speculation is all one can do. In the past, we have seen the market disregard any kind of speculation showing a rather erratic behavior.
The biggest thing that bitcoin needs as of now is use-cases. People are more inclined towards using bitcoin as a source of gaining profit in fiat instead of actual currency. This is partly because of the fact that there aren’t many opportunities present in the real world where people could use bitcoin easily as the payment option. If the acceptance of bitcoin needs to be increased, the opportunities also need to increase. More and more platforms are springing up each day that facilitate the handling of bitcoin for people alongside providing usage in real life. Some airports in Sydney, Australia, already have started accepting crypto payments. It will be interesting to see which industries incorporate the addition of cryptocurrency payments in their frameworks moving forward.
The potential that bitcoin possesses cannot be denied at all. As stated by Alexis Ohanian, the co-founder of Reddit, and VC of the venture capital firm Initialized Capital,
Bitcoin has had quite a bit of battle-testing over the years, and it’s certainly the most robust [cryptocurrency], and certainly one of the best proofs of crypto being a store of value.
There is a lot in store to come for bitcoin in 2019. With an economic crash just around the corner, as predicted by many experts of the game, it will be very interesting to see how things turn out for this asset.