Global Scenario of Crypto Industry in 2019
CBW -External Analyst
Jan, 10 2020
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.
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.
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
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.
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.
Overall,2019 has been a year of optimistic developments for this nascent industry.
CBW - External Analyst