The digital coin market shows a negative trend for the entire 2018 year. Compared to the historical maximum, the total capitalization of the cryptocurrency has decreased by almost 8 times. The cryptocurrency market shows a negative trend throughout 2018. During the year, news on the cryptocurrency market that are actively discussed in the media has a negative meaning. We recall the most important events that occurred on the cryptocurrency market.
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- Banking system against digital coins
- Internet restrictions
- Bitcoin ETF
- Formation of legislation
- Attraction of institutional investors
- Active development of the OTC market
- ICO market growth
- Cryptocurrency companies entering the IPO market
- Integration of financial conglomerates
- Integration with Internet companies
At the beginning of 2018, traditional financial institutions began to limit the capacity of participants in the cryptocurrency market. A large number of rather large banks around the world have begun to close the accounts of companies whose activities are linked to cryptocurrency. We could also remember Visa's decision to stop cooperation with the main European companies. All this has adversely affected the cryptocurrency companies. But it is worth noting that the bank restrictions have concerned not only legal entities but also ordinary customers lost the opportunity to buy cryptocurrency through their credit and debit cards.
A similar policy of the Reserve Bank of India has led to the fact that local cryptocurrency platforms have closed the encrypted trade. In mid-autumn, the cryptocurrency exchange of Zebpay was forced to close the cryptocurrency exchange service. A similar situation occurred in Zimbabwe, but cryptocurrency companies could challenge this decision with the help of the country's Supreme Court.
This policy of representatives of the traditional financial sector speaks only of their concern and desire to get rid of a potential competitor. If analyzing the cryptocurrency market, it becomes obvious that this sector is developing too quickly. This makes financial giants tremble with fear and uncertainty about the future. This event played an important role in the lowering of the encrypted market.
Another damage to the cryptocurrency industry in 2018 was caused by the major Internet companies: Google, Twitter, Facebook, Baidu, Alibaba, WeChat, Yandex, etc. All the information giants mentioned above promotion of cryptocurrency and ICO on their sites. This decision caused the corresponding consequences, in particular, has weakened the confidence in the industry and also the decrease in the market capitalization of the cryptocurrency. Mining applications have been blocked in the App Store.
Representatives of the Internet giant have explained their decision based on the fact that there is a huge number of scammers in the cryptocurrency sector, from which trusted users should be protected. However, only a few months later, Facebook and Google reconsidered their decision and partially canceled.
One of the most discussed topics in the sector since the mid-summer of 2018 is the possible launch of Bitcoin ETF. The fact is that the situation in the cryptocurrency market strongly depends on the SEC decision. We remind you that the increase in the market value of cryptocurrency, which took place in November-December, was caused by the launch of futures at CBOE and CME. Many experts believe that the launch of the ETF will be a much more powerful event than last year's futures.
But the situation that has developed around this problem is quite controversial. On the one hand, the SEC does not deny the possibility of giving permission to launch the Bitcoin ETF. But on the other side, The United States Securities and Exchange Commission rejects all candidates (or postpones the date of the consideration) who submitted the application during the year. The SEC staff explains their reasons enough uncertainties.
It is worth mentioning that in 2018 many funds and exchanges presented their applications: ITS, Direxion, VanEck, Winklevoss Bitcoin Trust, ProShares, SolidX, etc.
Based on the most recent data, the Securities Commission must make a final decision on the ETF before February 27, 2019.
We want to remind you:
SEC will release the decision on the Bitcoin ETF in February
The fall in the cryptocurrency market, which began in early 2018, has been caused by many reasons, one of which is the lack of a legislative basis. In other words, at the moment the cryptocurrency market is not regulated at all. Just this year, a large number of changes had to occur in this matter. But, unfortunately, everything happened not as it was intended.
It is worth noting that this year many countries of the world have processed invoices, which in one way or another have dealt with cryptocurrencies. Some states have limited the presence of digital currencies on their territory due to the complexity of regulation. Others, on the contrary, have encouraged and developed this direction in all ways. For example, on July 4, 2018, blockchain technology was officially legalized in Malta for the first time in the world.
At the end of the winter, the German authorities signed a law according to which Bitcoin was treated as legal means of payment and was therefore released from taxes.
This year was the first time in the history of the sector, when the regulation of cryptocurrency was discussed at the highest international level. For example, the mechanisms for regulating the sector have become an agenda of the G20 meeting. It was decided to postpone this topic until October, but so far no one has republished it thoroughly. This also had a negative effect on the ranking of the cryptocurrency.
This year, for the first time, serious entry into the market was seriously discussed. The interest of institutional investors in cryptocurrency assets is confirmed by a survey conducted by an independent consulting firm Capgemini:
- 44% of the large owners of capital interviewed are interested in investments in cryptocurrency;
- 29% of the large capital owners interviewed showed a high interest;
- 27% of the large owners of capital interviewed expressed moderate interest.
Another interview, conducted by an independent consulting firm, DeVere Group, states that almost 40% of large business owners want to see a list of cryptocurrencies for market capitalization in their investment portfolios.
The situation on the cryptocurrency market today is as follows (second CoinMarketCap):
- market capitalization of 130 billion dollars;
- 24-hour trading volume it is about 16 billion dollars.
The situation is not the best, to say the least. But it is worth noting that the second sign is not entirely correct. The fact is that we only see the turnovers that refer to the sale of shares. According to the company TABB Group, the UTS trading market is about 2-3 times higher than the stock index. It should be noted that such transactions can not be traced to the blockchain, since the private keys of the wallets are transferred more often than coins.
There is a sufficient number of great players in the cryptocurrency market (big miners, investors, organizers of ICO, etc.), which can not meet their demand with the help of exchanges. More and more OTC platforms have started to appear due to increasing demand in the sector.
Even apart from the depressing mood on the cryptocurrency market, the number of ICOs in 2018 is much more than in 2017: more precisely 741 against 514. The amount of funds raised also grew: $ 18.16 billion against $ 6.89 billion.
The most discussed project of this year was without a doubt TON by Pavel Durov, which managed to attract $ 1.7 billion. These funds were also obtained without public ICO, and Durov had to reject the vast majority of those who wanted to invest in his idea.
But if you consider the amount of money raised, the undisputed leader is the EOS project, which managed to raise about 4.2 billion dollars. This brand is the best not only in this year, but also in the entire history of the industry as a whole.
But even events as important as EOS or TON could not help a passionate interest of people to invest in cryptocurrency in the initial phase of the money supply. The situation is caused by a general decrease in the capitalization of the cryptocurrency market in 2018. Due to the downward trend on the market, most coins now cost less than the ICO stage.
ICO is certainly a fairly cost-effective way to raise capital, but despite this, many cryptocurrency companies have expressed their interest in joining the more traditional IPO market. The initial public offering or IPO is regulated by the SEC. Investors are more protected there and this fact attracts people with big capital.
From the beginning of December 2018, only one company successfully conducted its IPO, all the others did not go beyond applications or ad plans for the future until now. In August of this year, there was an initial public offering of Argo Mining Company. It works in a field of cloud mining. The results of the company are quite good, managed to raise $ 32.5 million during the IPO.
As we wrote above, some large financial institutions have limited the development of the cryptocurrency sector from their policies. But it does not concern absolutely all the financial conglomerates of the planet. Parallel to the collapse of the cryptocurrency market (financially), we can observe the integration of the world's largest banks in the sector (Goldman Sachs, HSBC, Barklays, etc.).
At the start of the year, Goldman Sachs, with the help of a startup Circle, bought one of the largest exchanges of Poloniex cryptocurrencies. The official sum of this transaction was not disclosed, but according to analysts' estimates, such an acquisition cost them about $ 400 million. It is worth noting that, Goldman Sachs has invested $ 136 million in a startup circle before acquiring Poloniex.
At the beginning of autumn the largest financial conglomerate of the land of the rising sun (Japan) Mitsubishi UFJ Financial Group started its currency MUFG in test mode. If the test is successful, MUFG representatives promise to introduce it into their payment system.
The Bank of America and other major owners of financial institutions around the world are curious about Technology Ripple (xCurrent), which helps banks save about $ 3 per transaction. This year, some major banks and the Ripple company have signed a cooperation agreement. It was highly expected, because XCurrent technology allows banks to save tens of millions of dollars in the year.
Along with the negative background that accompanies the cryptocurrency industry throughout the year, a growing number of Internet companies are trying to integrate digital currencies into their product. For example, a few months ago, the The Opera for Android browser has released support for a built-in cryptocurrency wallet. At present, this portfolio only supports ERC-20 and ERC-271 tokens, but developers promise to add support for new digital coin types in the near future. If you follow the news, it is easy to see how the event mentioned above is linked to the purchase by Bitmain Company of 3% of Opera Ltd for an amount of about $ 50 million (the Bitmain company is the largest producer of network equipment for the mining industry).
The Brave cryptocurrency browser shows good download dynamics: over 5 million installations in the last six months. This number can be explained by a good program to attract new users, which was launched by the brave developers. The browser charges 25 BAT for every 2 months of use. That is, for 1 year, you can accumulate 150 BAT, and for 2 years, 300 BAT. At current prices, it costs about $ 25 a year, but BAT is considered one of the most promising currencies in the next bull market. According to various estimates, it will go into TOP-10 and grow from 30 to 50 times. This means that by using this browser, you can get from 1,000 to 2,000 dollars in a couple of years.
The cryptocurrency market today is experiencing a downward trend. The market capitalization has decreased by almost 8 times, compared to the maximum values of this year. As you can see, the general background of the news is negative this year. But it is worth noting that, together with this, the infrastructure of the sector is actively developing and new institutional investors are coming to market. The prediction of the cryptocurrency market is not entirely clear, but the major experts believe that there are still many increases and are overwhelming.
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