Global Scenario of Crypto Industry in 2019


The cryptocurrency industry has witnessed a
roller coaster ride in the last year. Reviving the significant moments of the
Crypto industry in 2019, broadly, we can say this industry has gained a wider
spectrum in terms of growth, mass adoption and public awareness. Blockchain
technology has created ripples in various industries and cryptocurrencies got a
favorable welcoming carpet across several economies. 2019 was a transitional
year for old players and witnessed new entrants in the markets with more
aggression.
While pondering over some major events and
developments in the year 2019:
- We see that this year witnessed some major ICO scams. Thus ICO
regulations have been tightened across several countries.
- Several top security exchanges and crypto platforms were hacked
and the biggest frauds took place.
- More than $4.3billion have been lost through hacks and exit
scams as per crypto research firm CipherTrace
- Announcement of Facebook-owned cryptocurrency Libra and its
digital wallet Calibra spread shockwaves across the global industry.
- Blockchain technology was adopted massively across several
industries.
- Digital payments have been adopted massively.
- Cryptocurrency trading and transactions in several countries
were brought under regulations.
- Several countries including the United Kingdom softened their
stern outlook towards cryptocurrencies and unrestricted the Bitcoin and
Ethereum.
- Europe regulated crypto payments and cryptocurrencies whereas
the United Kingdom unregulated Ethereum and other cryptocurrencies
unregulated in the country.
- The oldest and top digital currency Bitcoin had a dull year
with consistent fluctuations in the price but settled down at the higher
side.
- The prices of Bitcoin, as well as other cryptos, witnessed a
steady rise in the latter half of the year.
- The second top virtual currency Ethereum underwent many crucial
updates this year.
- Securities and Exchange Commission (SEC) in the USA imposed
many regulations on the digital-currencies and has been in a court battle
with social media startup KIK and Telegram network TON.
Decentralized Finance (DeFi) at
Peak
2019 can be said as an accelerating year
for the Decentralized Finance (DeFi). This industry witnessed steep increase of
150 % in the year with a peak investment of $682million and expects more growth
in the upcoming year.
Cryptocurrency Prices
While analyzing the cryptocurrency
industry, Bitcoin is the standardized measure to analyze the annual scenario. The past year was started with the dwindled
price of Bitcoin at $4000. It was fluctuating throughout the year but in June
is reached at the peak after 17 months and continues to grow with little
fluctuations. The industry experts are forecasting
dominance of Bitcoin over the market as its price has maintained an ascending
graph at the end of 2019 with 115 % rise. But the situation is different for Altcoin
which had a relatively bad year in terms of market cap. Throughout the year the
Altcoin market cap has grown from $60 billion to $74.9 billion.
Cryptocurrency Adoptions
Official reports mention that the verified
crypto users have been multiplied in doubles in the past year. Also, a
substantial increase can be witnessed in the number of companies, who have
started accepting payments in cryptocurrencies. Corporate giants Microsoft and
Subway have started accepting Bitcoin payments. Gambling and Gaming community
has been proliferating with more convenience of crypto payments. In terms of legitimizing the crypto
industry, New York-based Wall Street major brokerage firm Fidelity Investments
acquired a trade license in cryptocurrencies and announced its custodial
services for Bitcoin. This is considered as a significant breakthrough for
drawing more institutional investments in this domain. Starbucks, Boston Consulting Group,
Microsoft and Intercontinental Exchange collaborated to launch the Bakkt crypto
platform for enabling crypto-based products.
Facebook's Libra Project Announcement
The greatest highlight of the Year happened
in June when Facebook announced its ambitious cryptocurrency Libra project in
Switzerland. It created ripples of panic and excitement across the globe. While
it saw resistance in its own country, it has compelled big powers like China
and the European nations to reconsider their crypto policies. Several financial regulators and
governments are concerned that the Libra cryptocurrency will destabilize and
monopolize their economics and they are taking steps precautionary steps to
curb the potential threat to their monopolies. The scheduled launch of currency
Libra and its payment wallet Calibra is in 2020.
Crypto regulations in Various Countries
The proposed launch of Libra has threatened
governments like China which are now into a process to develop their digital
currency to control the supposed manipulation of Libra on their economy. North
Korea, has also announced the development of its digital currency. While the United States has taken more
regulatory steps towards digital-currencies, nations like Portugal have set
liberal trading policies for cryptocurrencies and have made Bitcoin tax free. Asian markets have maintained their status
as Crypto-heaven for the cryptocurrency industry. While the big market like India has banned
the cryptocurrency industry, a bill is scheduled to be presented in Parliament
in January 2020 regarding the reconsideration for the crypto policies. The foundation for defense Democracies
(FDD) has published a report on cross-boundary policies which states that
Russia, Iran and Venezuela and China want to minimize the US dollar dominance
on their economies and thus are opting for cryptocurrencies.
Regulations against so-called Privacy
Coins
The Financial Action Task Force (FATF) regulated
the privacy coins and has categorized them as illegal. Privacy coins like Monero, Zcash, Dash,
Super Bitcoin, and Horizen have been delisted from the OKEX exchange in South
Korea. Whereas Upbit exchange delisted Dash, Zcash, PIVX, Monero, Bittube,
Haven following the regulatory measures from FATF.
Initial Coin Offerings
In January there were 151 ICO projects
which decreased to just 30 till December. Most ICO projects saw a failure
in first quarter of the year with 115 collapses in January, 48 in February and
120 in March. Though several fraudulent
ICO projects were failed, a significant rise in blockchain related projects has
been observed.
Crypto scams
Twelve major crypto hacks happened in 2019
including 11 crypto thefts and one was in data stealing. Thus 2019 has been
labeled as the year of scams, hacks and financial frauds by the Cipher Trace
research firm which estimated $ 4.3 billion loss through the exit scams and
hacks. Top Crypto Exchange Binance lost 7000
Bitcoins in the hack that happened in May. Overall $292,665,886 worth of
digital currencies were stolen through the hacks at crypto exchanges and
510,000 user logins were hacked throughout the year.
Conclusive words
Overall,2019
has been a year of optimistic developments for this nascent industry.

Jayashree Ingle
CBW - External Analyst
INDIA