The cryptocurrency the market has been in disarray last year as the prices of most of the tokens and coins on board have plummeted by more than 80%. Bitcoin saw a price collapse from an all-time high of $ 19,800 USD to $ 4,000 USD today following a selloff in the last year. However, falling prices do not change the bright future that the industry is set according to Travis Scher, the VC's Blockchain of the Digital Currency Group (DCG).
In a medium post, Travis shared his thoughts on the future of Bitcoin and other cryptocurrencies. In addition, he has offered ways in which cryptocurrencies can rebound from the valley of death to meet the mass potential that the field holds.
"The industry must engage with regulators".
Last year the gavel collapsed hard for cryptocurrencies while sector regulation increased substantially worldwide. Cryptocurrency companies have struggled to cope with these extreme conditions by forcing some to close the store. DCG has declared that compliance and regulation are the most difficult challenge that most companies faced in 2018, overcoming the challenges of product market adaptation and capital constraints.
"Policymakers must create and enforce rules that leave room for good actors to innovate, while limiting the potential for bad actors to engage in fraud and manipulation."
Scher called on governments around the world to work on a regulation that increases creativity and innovation in the industry while limiting the bad players in the industry. In the past, governments such as China and India have closed their local exchanges by citing unfair practices and scams. However, Travis believes that a more pragmatic approach might have been taken to keep good cryptocurrency exchanges in place while driving away the few rotten ones.
The dark "regulatory skies" have a positive side, while the jurisdictions in the United States, Japan and Mexico are working on regulations to promote the growth of the sector. The last two have rules that must be followed by local exchanges that allow banks to feel at ease by offering these exchanges their services.
"Many start-ups, projects and cryptographic funds will die".
In a previous article, Lujan Odera, a cryptocurrency and blockchain analyst, explained the dangers of having too many cryptocurrencies. The number has exceeded 2000 projects since the advent of digital resources, but very few of these coins offer a true use case. In reality, most projects are copies of previous projects without a vision of their own and do not solve any problems.
The long winter in the cryptographic markets is not yet in the process of melting and funding could be more difficult in 2019 than it was in 2018. Over 90% of these projects are doomed to fail because they sold unrealistic short-term visions to investors, held too much capital in cryptocurrencies and let their burning speed get out of hand.
Strong cryptographic companies will become stronger.
With the weak companies banned, the remaining companies will only get stronger according to Travis. He compared the current changes in the cryptocurrency sector with the Darwinian evolution of natural selection. He wrote,
"The easy earnings of 2017 and early 2018 have fueled the lack of discipline, excessive optimism and, in some cases, arrogance, companies with shaky foundations will be wiped out in 2019, but those that are well managed and guided by the mission will end up becoming even stronger ".
The cryptocurrency industry should prepare for institutional investments
Last year there was an increase in institutional investments in cryptographic space, as more and more companies tried to integrate the blockchain into their systems. The game is one of the key areas that has seen the massive adoption of blockchain technologies in 2018. Global financial corporations including Goldman Sachs, JP Morgan, Santander Bank are investing heavily in cryptographic space publicly. Others include Facebook, which recently announced to add a stable currency on its platform.
These institutions have a huge role to play as cryptocurrencies aim for global adoption.