The Price is Wiped, But Hard Work is Paying Off
As we end 2018, most cryptocurrencies are down at least 80% from the mouth-watering highs we witnessed just a year ago. If we look deeper, we can see a wave of innovation that’s not distracted by speculative prices, working hard to make blockchain tech a serious, scalable sector for worldwide adoption.
Only the strongest are surviving. EOS currently leads the pack in terms of network activity, according to blockchain stats Website Block’tivity. Ethereum is pushing ahead with its plans to upgrade its protocol to PoS, and Bitcoin’s long-awaited scaling solution known as the Lightning Network has grown exponentially over the last twelve months.
Progress and network growth of the Lightning Network throughout 2018 was tweeted by Jameson Lopp. The Lightning Network will be compatible with Bitcoin, but also a wide variety of other cryptocurrencies. This is just one example of the amount of development happening behind the scenes in the blockchain industry.
2018 was just as fast-paced as the previous year and proved a much harder year than many anticipated. Investors were tested, blockchain-driven companies and projects had to prove their worth, and the financial institutions have now begun to make long-awaited moves into digital assets – they innovate while the masses panic.
Exit Scams and the Year of Regulations
Despite the smart minds working their magic, many people lost entire fortunes, not just from the bear market (that would imply they still have possession of their funds), but also from fraudulent projects and bad actors who exited and stole investors’ money.
Ponzi schemes such as Bitconnect targeted naive investors, and as a result, an estimated 1.5 million people lost their hard-earned money. This included life savings, and entire lives were destroyed.
ICOs that made their fortunes in the mania phase of 2017 have since sold their holdings with a trail of broken promises and unfulfilled road maps.
2018 will be known as the year cryptocurrencies became regulated. ICOs and exchanges took the brunt of the regulatory wrath, but throughout this year, authorities began to provide clarity on what types of digital assets fall under the definition of securities and how digital assets and the ecosystem will be taxed and regulated.
SEC Chairman Jay Clayton: “I want to go back to separating ICOs and cryptocurrencies. ICOs that are securities offerings… we should regulate them like we regulate securities offerings. End of story.”
According to the SEC’s official report earlier this year titled “Statement on Potentially Unlawful Online Platforms for Trading Digital Assets,” exchanges must register with the SEC as a “national securities exchange!”
“A number of these platforms provide a mechanism for trading assets that meet the definition of a ‘security’ under the federal securities laws. If a platform offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.”
The above quotes are snippets from infamous moments of 2018 as the cryptocurrency community and regulatory powers locked horns.
With 2019 upon us, there will likely be many more twists and turns for cryptocurrencies. 2018 can be viewed as having many positives, and although the price leaves a bitter taste in the mouths of many, an asset as distressed as Bitcoin could be an excellent purchase, just like in 2015 and 2016.
Fundamentally, it was an amazing year because regulatory clarity is more transparent and technological progress has exploded since the price crash.
With the stock market turning into a circus and more debt than any other time in human history, contrarian and wealth-preserving investments could be the smartest route to take in the next decade, let alone next twelve months…
This is not investment advice; please always do thorough research and only invest what you are willing to lose, especially in times of uncertainty.