Revaluation of values: the results of the crypto world in 2018
After the dizzying rise of cryptocurrencies in December 2017 in 2018, it’s time for the harsh truth: the authorities took up the regulation of the market, and investors stopped believing in the ICO
Last year kriptonyte met rather tense, rather than in the euphoria of growth of cryptomeria in 2017. What has happened in the last 12 months and what digital currency is included in 2019?
Prohibitive trends in Asian markets
News from China and South Korea always have a significant impact on the crypto market, as these countries account for a significant share in the total volume of trading in digital currencies. Negativity from Asia all year to put pressure on the rates of cryptocurrencies.
2018 was not set at once: at the very beginning of January, the famous aggregator Сoinmarketcap.com excluded from its analysts trading volumes of a number of exchanges in South Korea, in particular Bithumb — at that time the second largest crypto-exchange in the world. In February 2018, the Chinese government has banned local investors to make cryptocurrency transactions on stock exchanges anywhere in the world that has deprived of participants of the stock market the ability to legally buy the cryptocurrency through exchanges of Shanghai or Singapore. China continued to struggle with the circulation of cryptocurrencies on its territory throughout the year. Despite the fact that the exchange of Fiat money for cryptocurrencies and the withdrawal of funds back was outlawed in 2017, in the winter of 2018, Beijing was forced to recognize — activity on alternative sites outside the country is growing. Reacting to this, the Chinese authorities throughout the year actively blocked domestic access to local and foreign platforms that provide centralized trade in cryptocurrencies. Most likely, in 2019, China will continue to pursue a prohibitive policy in the crypto sphere, targeting individuals and companies that provide services for market creation, settlements and clearing.
Conservative position of the American regulator SEC
Representatives of the SEC (us securities Commission) in March expressed concern that many online platforms for trading digital currencies are mistakenly perceived by investors as officially registered and regulated. Such platforms call themselves “exchanges”, which may give the impression that they meet national exchange standards.
In the end, the SEC has formulated requirements to sells tokens to cryptomeria: they must complete their registration in the Commission as national securities exchanges. This automatically protected investors in digital assets with securities laws and sec oversight.
Although some of cryptoplugin argued that the use of strict standards for the selection of only high-quality digital assets for trading, the SEC made it clear that they cannot be equated to securities, and also issued a communiqué that does not check the trading protocols used by cryptopleurum. Thus, the Commission withdrew responsibility for the correctness of their work.
The ban on advertising of crypto-currencies in social networks
In March 2018, Google has banned the advertisement of ICO, cryptocurrency exchanges and cryptocell and recommendation of the content by trading cryptocurrency. The Internet giant did not explain the reasons for the ban, but this happened simultaneously with the strengthening of the struggle of American regulators with the ICO, the integrity of the organizers of which often causes doubts in the US authorities.
The example of Google was immediately followed by Twitter, which at the same time banned any advertising related to the crypto industry (all kinds of advertising about the sale of tokens, initial offers of coins, wallets of crypto-currencies and exchangers). This, as well as the negative background in the media immediately led to a decrease in the capitalization of the crypto market.
The largest social network Facebook also banned advertising of cryptocurrencies and ICO, but in June softened the ban. Promo to raise funds for the tokens remained impossible, but is associated with cryptocurrencies, could be placed after consideration by the employees of the company. In may, Facebook even got a unit for the study of the blockchain, which caused rumors about the upcoming appearance of its own cryptocurrency in the social network, which, however, has not yet been confirmed.
End of ICO — problems for ether
The catastrophic disappointment of market participants in the ICO led to a decrease in the cost of the main full-fledged cryptocurrencies — Bitcoin and Ethereum. This had a particularly negative impact on the latter. The fate of Vitaly Buterin’s project is under threat: if the developers do not eliminate the difficulties with scalability, speed of transactions and security of smart contracts, the crypto community will switch to other tokens. For example, owners of smart contracts will be able to pay commissions in ERC-20 tokens, not on the air. Further demand declines threaten to see Ethereum lose its value as a coin.
Doubt about the future of Ethereum led to mass sales of ETH projects that conducted ICO (ether is the main digital currency for which crypto companies issue their tokens). According to the report of Trustnodes, published in September 2018, only in the first 10 days of this month ICO projects sold 160,000 ETH. In total, in September, ICO projects got rid of almost 300,000 coins (equivalent to about $90 million).
According to the results of last year, the Ethereum community was at a crossroads, which way to choose to increase the value of the coin: to popularize the use of the Ethereum Protocol by other crypto-currencies or to raise the demand for ether as a means to pay for something.
Result of year
1. In relation to the absolute maximum fixed more than a year ago (December 17, 2017) ($19,961, according to Coinmarketcap), the exchange rate of the main cryptocurrency fell by January 1, 2019 by 81% to $3,738. At the same time, bitcoin Cash and Ethereum cryptocurrencies sagged in relation to their historical highs much stronger — by 98% and 94%, respectively.
2. Even those who were very much involved in the ICO in 2017-2018, realized that it is necessary to sell the coins remaining in their hands and leave this market. Strongly contributed to this trend, the initiation of a large number of investigations by the SEC and intelligence services of various countries about fraud in the ICO. The results of these studies will be available to the market in the spring of 2019.
3. Search for application of blockchain. Many autumn forums and conferences have shown quite clearly the growing impact of technologies on the applied spheres — from the use in transportation and processing of tires to the conclusion of smart contracts between copyright holders and content users. Even the Russian Court of intellectual rights (IPR) has placed on the blockchain network IPChain (National coordination center for processing transactions with rights and intellectual property) information about the change in the composition of the owners of several trademarks and was the first in the judicial system of the country who carried out such a “landmark for the digital market of intellectual property and digital economy” practice.
Perhaps 2019 will be the year of the emergence of an alternative to the exhausted model of raising funds in the form of ICO, but the success is likely to wait for those projects that demonstrate the real use of their products. In this regard, the era of public token sales is likely to be a thing of the past.