Chaotic Volatility: Unpredictable Trends Of 2019 - To The Moon or Not?
According the chaotic volatility of cryptocurrency in the current months and big expectations from the big launches like BakkT or ETF, and controversial views on mining, it’s hard to predict, what will the cryptomarket become like next year.
But some of our experts have some viewpoints on the hidden and obvious trends based on a deep market analysis focused not only at BTC price. In the interview below, the director of the Australian crypto managed fund Egor SIDELSKA shares his opinion at some of facts that might be more positive as we used to think.
BNT: It may be a typical question, but what awaits cryptocurrency in general in the near future - rise or fall?
ES: 2019 is set to be a very exciting year for digital assets, increased distribution channels from institutions, further growth and development of platform, protocols and tokens, and a continued increase in awareness and adoption, albeit slowly. There are many metrics to look at besides price: volume, new wallets, velocity, GitHub commits, user adoption, user accounts, hash power, total nodes and much more. These are all growth metrics that would make evaluating a company easier, as these are lifelines for cryptomarket.
BNT: So what about the prospects - if there any facts, that tell about the mass adoption of cryptocurrency?
ES: Regarding price there is a lot to look forward too also - the prospective ETF (should it be approved), Bakkt launching, SIX HODL seeing record volume multiple days in a row and the preparation for the halving in 2020 - these are all positive signs for the market and the asset class in general.
On a more realistic note, there are multiple positive stories at any given moment for digital assets because it's so new… In reality, unless we see a real path towards adoption, it is unlikely to move the price quickly. Adoption includes better regulation, support, governance and insurance for retail users (note, not investors). Such acception means that there is an inherit and profitable use case to run a blockchain project, cryptocurrency or using a token for intended purpose - that is it, adoption is not about speculators moving the price - this is finite and non-progressive.
BNT: Here is another big question that we ask all our experts on the eve of the new year - will the consolidation of the cryptocurrency market continue and what new institutions are expected to come in?
ES: Many new institutions are slowly moving into the space, but they all have been moving for the last 2 years - some quicker than others though. I would be very surprised if there was a big shift from institutions to move into the space quickly.
The thing is the consolidation itself is a good thing for the market. It gives time to rebuild and focus. However, a lengthy consolidation will only make it more difficult for the technology to progress. People are interested and see an opportunity as the value and message climb, if the message is negative, as it is now, it’s difficult to make the leap.
BNT: Now many experts support the opinion that mining is almost dying. What do you think about it?
ES: Mining will see the biggest impacts in 2019 as Proof-of-Work algorithms start to populate the market and the cost of buying expensive mining equipment becomes a bigger burden. Bitmain, having posted significant losses this year, also doesn’t help as mining tech start to become more and more competitive. Alternative mining products come to market, which is positive, because it creates new opportunities for businesses looking to set up pools.
BNT: Will the promising Lightning Network have a bright future, or is it a dead-end branch? What development can we expect in 2019?
ES: The Lightning Network is a fantastic technology that has proven to work and attract talent. This network is incredibly promising but it’s hard to see short terms wins for a side chain where the original incumbent struggles to get traction.
BNT: How can we detect or analyse the cryptoprojects, which of them might become successful, can we make any suggestions on this point now?
ES: The consolidation will draw out the positive projects from the rest of the pack, once the dust is settled it will be clear which ones may continue to grow and which are to die in the 'no volume game’.
BNT: This year the number of corporate blockchains has grown rapidly. Will this trend continue in the future and will investors be interested in them?
ES: What is a corporate blockchain? If you mean a private blockchain, then I can say, that public, trustless blockchains are the only blockchains… Otherwise if you need a corporate network - just use a database, it’s much more quicker and cheaper.
BNT: In view of the great uncertainty and volatility, is there a prospect for cryptocurrencies in principle? Is it justified to call tham a bubble?ES: Cryptocurrencies will be the early winners in the next 3-5 years, as digital money is the easiest concept to understand, invoke and use. We believe the next step will be platforms until a killer app comes. And when it does, the world will take notice...
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