In terms of price action, 2018 was a dismal year for many of the crypto industry’s participants, as the Blockfolios of investors worldwide were painted in red all year round. Yet, as established by industry pundits like Armin Van Bitcoin, Travis Kling, and countless others, the past 12 months have been exorbitantly successful for this nascent industry. And a notable industry insider, one that hails from one of the “Big Four (accounting firms),” believes that this unrelenting drive for innovation will continue into 2019, contrary to the opinion of zealous naysayers and diehard fundamentalists.
Institutional Involvement, Clear Legislature Will Mature The Crypto Industry
Henri Arslanian, PricewaterhouseCoopers’ (PWC) fintech and crypto lead for China & Hong Kong, recently sat down with Bloomberg TV’s “Daybreak: Australia” segment to discuss his outlook for this budding industry in the upcoming year. Allen, echoing the sentiment ballyhooed by skeptics, simply asked the guest if crypto is, well, “over.”
Arslanian, obviously poised for such a question, noted that there’s a lot to look forward to in 2019, specifically citing the institutional influx that has (and may continue) to bless the cryptosphere. The seeming crypto advocate noted that while 2018 has seen institutions fleetingly dip their toes in the Bitcoin waters, 2019 will see the arrival of the “institutional herd,” as one Mike Novogratz likes to put it.
These comments are interestingly similar to that held by Asiff Hirji, the president of Coinbase, who recently told CNBC that 2019 will “continue to be a good year for institutions heading into crypto.”
The Bloomberg guest noted that crypto-centric subsidiaries from Wall Street juggernauts, like Fidelity’s Digital Asset Services, and partnerships between traditional markets firms and blockchain startups (Nomura and Ledger, for example) could catalyze this movement. Arslanian also noted that venture investment, like Goldman Sachs’ capital allocation into BitGo and Circle, could aid in drastically maturing this infantile industry.
Arslanian, when asked about what will make 2019 a monumental year for cryptocurrencies, drew attention to the advent of regulatory clarity. PWC’s in-house crypto expert explained that easily defined legislature, especially in “less nimble nations,” will “give comfort” to institutional players, catalyzing a newfound wave of adoption. And as seen with the recent drafting of a U.S. bill, a bipartisan effort from two forward-minded congressmen, which may place cryptocurrencies out of the jurisdiction of the U.S. Securities and Exchange Commission (SEC), regulatory clarity is likely just around the corner.
2018’s Bitcoin Crash “Cleared Out The Noise”
When queried about Bitcoin’s cyclical nature of “booms and busts,” Arslanian noted that the recent collapse in the Bitcoin price can actually be classified as a bullish happenstance, as it “cleared out the noise” that plagued this sector. Backing his claim, the PWC cryptocurrency head noted that the Dotcom Crash cleared out the money-grabbing startups, leaving only companies that went on to change the world, namely Amazon.
Related Reading: Dotcom Bubble Burst May Have Been Necessary; What About Crypto?
Yet, he pointed out that there remain many cryptocurrency-centric startups that are reeling, specifically due to poor treasury management. And, as made clear by ETCDEV’s recent collapse, and the layoffs seen at ConsenSys, Steemit, and Spankchain, this is a valid concern. Arslanian noted that this market tumult is a byproduct of speculators betting on crypto’s price en-masse, before adding that 2019 is likely to be a positive year for this industry nonetheless.
In closing, the PWC representative name dropped a number of subsectors that could be “interesting to watch” in the year to come. These, as made abundantly apparent by the industry’s recent thematic developments, are the onset of stablecoins and security tokens, two brands of crypto assets that have both been dubbed blockchain’s “killer applications.”
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