Each year I close out my articles by making some predictions about the upcoming 12 months and the changes that we may see in the Ethereum ecosystem and beyond. Last year I made a handful of predictions for 2018, some of which were on point while others – particularly my price guess – were just a little off the mark. First let’s have a quick recap before moving onto 2019:
Last Year’s Predictions
- Coinbase Adds 5+ New Cryptos – exactly 5 new coins have been added to Coinbase with dozens more now being explored.
- BitConnect Collapses – this may have seemed obvious in hindsight, but at the time of the article BitConnect was trading at its all time high of ~$400. A few weeks later the coin would trade at $5 before tumbling under $1 and losing nearly all trading volume.
- $5tn Cryptocurrency Market Cap – while explaining that it was likely we’d see 50% of the market wiped out (it was more like 90%), the market cap today has failed to recover at all, stagnating at around $100bn.
- Stablecoin Ecosystem – a little vague (have tried to be less vague this year) but the point being that stablecoins would become kind of a big deal. Circle partnered with Coinbase to launch the stablecoin USDC and TrustToken launched their asset-backed stablecoin at the start of 2018; both have $200m USD on their books. MakerDAO, who raised $15m through VC firm Andreessen Horowitz this year, also launched their decentralized version of a stablecoin (DAI) now valued at $55m and Tether’s USDT went from the 24th largest coin (by market cap) to the 5th. All in all, the top 4 stablecoins (USDT, TUSD, USDC, DAI) account for 2.8% of the entire cryptomarket. Up from <0.1% 12 months ago.
- Monero (XMR) Will Return to Top 5 – privacy coins in general didn’t get much of a bolster this year. Monero moved down 1 position to 11th while its competing privacy coin, ZCash, moved up just 2 places to 19th, despite its listing on Coinbase.
- More Bitcoin Forks – Bitcoin Diamond, Super Bitcoin and (a Bitcoin Cash fork) Bitcoin SV all launched in 2018. None of them are interesting.
- Ethereum Price Prediction – “Predicting prices is one way to look foolish” but I did it anyway. Anticipating a sharp crash and an even sharper rise, I predicted the price of Ethereum to reach $5,000. Well, there’s always 2019 to look forward to isn’t there?
Without further ado, what major changes might we expect to see from the world of crypto in 2019?
2019 Cryptocurrency Predictions
1. Stablecoins account for 20% of crypto market
Stablecoins provide enormous benefits over bank money. Placed in the right hands they are faster, more secure, more liquid and more useful than digital bank notes. The flow of money into stablecoins will be unrelenting and for that reason many more stablecoin projects will appear on the scene. Stablecoin growth is also a key indicator of cryptocurrency adoption, with more investors stepping into the ecosystem (and staying there) without having to hold highly volatile assets like ETH or BTC.
Most stablecoins do not provide any investment opportunity for those outside of the issuers themselves, however the decentralized organization, MakerDAO, has issued a governance token (MKR) that provides its holders with some exposure to this growing asset class. The mechanics of the MakerDAO smart contracts should place upward pressure on the price of MKR assuming continued demand for its stablecoin, DAI, and responsible governance. Other decentralized stablecoins are no doubt being worked on as we speak.
2. Major announcements in blockchain-based identity
One of the most interesting aspects of Ethereum that has yet to enter our crypto-conscience is blockchain-based identity. The list of data breaches that have occurred in 2018 alone is as long as my arm and the number of people with compromised data extends into the billions. In November 2018, as many as 500 million Marriott guests had their data compromised. The situation is simply farcical.
Behind the scenes there are some major shifts happening in the land of digital identity. Microsoft is working on a little known project to build a blockchain-based identity standard that can be adopted globally. DocuSign announced earlier in 2018 that signed agreements can now be written to the Ethereum blockchain and integration of blockchain-based identity appears to be the obvious next step.
Facebook’s latest blockchain recruitment effort has also led to broad speculation that the platform may be looking to release “FacebookCoin”. More likely however, is that Facebook is looking to use blockchain technology to fix the platform’s identity crisis. I expect Facebook has big plans for a blockchain-based identity system and this could well come to light in 2019 (followed by a double digit percentage point jump in share price).
3. Major game platform announces blockchain project
Digital assets made their debut in November 2017 when CryptoKitties launched with enough hype to damn-near stop the Ethereum blockchain. Since then, the concept of “non-fungible tokens” (crypto-collectables) has been taken further, progressing from digital kittens to collectable card games (CCG) with the most well-received being the Coinbase-backed game “Gods Unchained”.
The CCG market is one that platform giant, Steam, recently entered into with Artifact – a game which will feature a $1m prizepool tournament in Q1 2019. Artifact uses Steam’s multi-million dollar marketplace to trade cards, earning the company hundred million dollar profits at the expense of their players. Steam’s marketplace fees range from 5-10% and can be as large as 50% on micro-transactions. Game items can only be traded on the Steam platform and funds earned from the sale of an item are issued as Steam credit (not redeemable in any way).
Ethereum not only removes these barriers and inconveniences but adds new features too, benefiting developers and players alike. In 2019 I expect a major gaming platform to announce integration with Ethereum, either as a means for deploying non-fungible tokens, trading them or both.
Image Credit: BeyondBlockTaipei
4. Ethereum issuance reduction rallies price
Unabated by the wild miscalculation of this year’s Ethereum price prediction, I expect that the upcoming reduction in issuance from 3ETH to 2ETH per block on ~January 16th will lead to a significant rally in ETH/USD and ETH/BTC; returning it to the second most valuable cryptocurrency on CoinMarketCap. There’s not much more to say here, other than I believe that Ethereum’s supply schedule is broadly misunderstood by most investors and that the realization of what’s to come (in terms of supply and demand of ETH) will be cause for celebration for those already invested.
5. Dan Larimer announces new project
Dan Larimer, the founder of Bitshares (no longer involved), Steemit (no longer involved) and EOS (somewhat involved) has hinted at yet another project that he may be interested in pursuing. In the EOS Telegram channel, Dan Larimer mentioned a new token that he had been researching.
This hypothetical token would be immutable, non-programmable, and limited to a currency role. It would in no way compromise the much larger use cases for EOSIO applications.
Given that the idea sounds remarkably like Bitcoin, it is hard to know whether Larimer was being sarcastic in his post. However, given his track record and the lack of a statement to say that he was “just joking”, it seems plausible that the skittish young developer may well depart EOS at some capacity.
6. Bitcoin SV price collapses
There were two hilarious/tragic things that happened to the crypto community in 2018.
First, there was the Blockchain Mediterranean Cruise, which saw hundreds of newly discovered millionaires sleaze about a boat for 4 days, interspersed with high-production-zero-preparation debates that – if you can bear to cringe through some of it – makes for some entertaining viewing.
Bitcoin Cash was a major feature on the Blockchain Cruise and this leads onto our second cause for hilarity and the topic of this prediction:
The price of Bitcoin SV, the Bitcoin Cash fork of November 2018, will collapse this year.
The Bitcoin SV blockchain is led by a man named Craig Wright, the same person who once visited Rwanda to tell a room full of people that he had more money than their entire country. Bitcoin SV (SV is used ironically to denote “Satoshi’s Vision”) makes very little sense from an investment or utility point of view; the currency has opted to revert to 2009 Bitcoin and the plan is to make no further changes. Security is also a major issue on Bitcoin SV; mining pool CoinGeek owns about 40% of the hashpower on Bitcoin SV and Craig Wright’s talk of “sunken treasure” (in reference to lost coins) hints at the possibility of recovering (some might call it “stealing”) funds.
7. XRP finally gets listed on Coinbase after 2 years, price doesn’t move
That is all.
8. Ethereum price prediction
I’ll start again by saying that predicting prices is one way to look foolish. However, instead of continuing with a prediction, I encourage you to see our Augur prediction markets for the price of Ethereum here. In Q1 2019 I plan on relaunching the entire website, including the Augur predictions, so check back soon!
As always, the above should not be treated as financial advice and any predictions may be wildly inaccurate. Investing in cryptocurrencies is highly risky, do your own research and consult a financial adviser if necessary!