1 April 2020
Cryptocurrency was born 9 years ago, from the technical document and the first Bitcoin block has become a common type of asset today. Merchants around the world are attracted to a cryptocurrency market full of promises of exponential growth, as well as the opportunity to increase trade in a volatile market.
The cryptocurrency market is not for the faint of heart when the price rises and falls rapidly. 2018 became quite exciting for traders as the market matured. Making bold predictions in a fast-growing market is a particularly complex task. However, there are several important issues that can evaluate the market in the coming months.
Here are forecasts for the encryption market that investors and traders should follow in the next 12 months.
The volume gradually moved to decentralized exchanges.
Cryptocurrency investors want to create a more inclusive, transparent and fairer financial system than the current system. The number of decentralized exchanges is increasing.
However, centralized exchanges are hampering the growth of the decentralized financial industry. By collecting all the information from the user accounts at a given time, these exchanges are an attractive target for hackers and authorities.
From the infamous Mt.Gox incident that led to the market collapse in 2014 until the last hacks, including Bithumb, Bitgrail and Coincheck, centralized exchanges have shown weaknesses in the cryptocurrency market.
Fortunately, exchanges that allow merchants to control their funds online are increasingly legal. Decentralized exchanges promise to bring new features (without approval and without confidence in third-party intermediaries) of Blockchain in the transaction process, especially those built. Built on the 0x protocol.
For example, the IDEX operator carries out a daily trading volume of approximately 3 million dollars. This number is still significantly lower than that of giants like Binance, often exceeding the $ 1 billion mark. But decentralized exchanges are increasingly intuitive and easy to use.
Trading volumes will inevitably change to decentralized exchanges, where investors can enjoy the security of transactions on the Blockchain platform.
Ethereum was created with the very serious purpose of revolutionizing the financial system with smart contract technology. However, the first use case of the platform is a fun and tough digital game called CryptoKitties.
Cryptokitties is a blockchain-based game that allows players to collect and raise digital cats. At the time of the market boom in December 2017, Cryptokitties was observed for 4,833 ETH (more than $ 2 million) in daily volume. However, Ethereum is only able to perform 15 transactions per second, so this is still a problem that technology needs to improve.
The Ethereum developer team is working hard on solutions such as Casper, Sharding and Plasma to increase commercial capacity. Also projects such as EOS and Cardano (ADA) launched Mainnet in 2018 with the aim of significantly increasing transaction speeds.
As the scalability of the DApp platform begins to improve, the attention of investors will focus on the applications created on these platforms.
The acceptance of the SEC of the Bitcoin ETF is only a matter of time.
Cameron and Tyler Winklevoss with an ETF proposal were rejected in 2017. The SEC blames Bitcoin for its volatility and liquidity. 2018 will be a significantly more established ETF. Bitcoin futures contracts at CBOE have been negotiated unimpeded for the past 7 months, while Coinbase Custody can ensure that Bitcoin ETF assets are secure in a secure and compatible storage solution.
Only a nod from the SEC, investors will invest a large amount of money in the market.
Investors are too familiar with statements that Bitcoin and cryptocurrencies are a worthless asset. But Bitcoin is constantly demonstrating its value in the community, and its acceptance and use is increasingly widespread. Even so, assets in the cryptocurrency market still lack an appropriate and comprehensive valuation framework.
The lack of quantitative value models has caused a lack of connection between value and potential: currency prices fluctuate mainly according to the sentiment of investors.
A valuation framework for assets is necessary and will ensure that the market revolves around these valuation frameworks.
Unlike utility tokens (utility tokens) that aim to decentralize regulatory risks, security tokens (security tokens) represent the ownership of traditional assets such as real estate, stocks, bonds.
Blockchain technology will help build a 24/7 scale, transparent and global for security tokens.
Stock tokens have a large market, in the United States alone, more than 70 billion dollars in this type of assets.