2018 has come and gone, and with 2019 just a few days in, many are wondering what the new year will bring for die-hard cryptocurrency fans.
While 2017 was the year of the bull market (bitcoin reached its all-time high of nearly $20,000), 2018 was the year of the proverbial opposite. Bitcoin and all its altcoin counterparts began to fall in dramatic fashion, losing anywhere between 70 and 90 percent of their overall values and earnings.
Bitcoin, for example, has fallen to about $3,800 at press time, marking a loss of over 75 percent, while its main competitor Ethereum – known for the ether token and its smart contracts capabilities – fell from roughly $1,400 last February to about $100 at the time of writing, marking a fall of over 90 percent. EOS, bitcoin cash and Ripple’s XRP are also some of the many digital assets down for the count.
What Will Happen in 2019
Will this year be any different, or can we expect more of the same over the next 12 months? It seems like prices are no longer the primary concerns of analysts and industry leaders (i.e. Tom Lee has stated he’ll no longer be predicting bitcoin prices in the future), but rather what might be or is occurring in the industry in terms of legitimacy and regulation. The only way for crypto to garner any sort of institutional attention and legitimacy is for regulation to take hold, and granted people don’t start playing by the rules, HODLers can kiss their long-term stashes goodbye.
For the most part, we are seeing organizations like the Securities and Exchange Commission (SEC) begin to weave their way deeper and deeper into the cryptocurrency arena. Companies like Paragon Coin and AirFox were forced to pay harsh penalties and $250,000 fines when they failed to register their initial coin offerings (ICOs) as securities, though they did so willingly and expressed joy that the results weren’t any worse.
You Have to Register
Law firm Herzog, Fox and Neeman partner Roni Cohen Pavon believes that instances like these really set a precedent in the cryptocurrency arena. While we’re likely to see more companies fail to meet specific protocols, eventually the desire for legitimacy and legality will take hold the way it should. He comments:
“As we see the rise of security tokens and their purpose as a fundraising method, we will also witness regulators starting to license trading facilities which grant liquidity to these assets, finally giving them a real advantage. I also believe that we will see more regulators trying to add trust to semi-banking services such as crypto custodianship and payment processing, which ultimately makes the retail investor and consumer experience better.”
Harder Than It Looks
One of the big problems with registering an ICO as a security is the amount of time it takes. The registration process with the SEC is quite long, often requiring extensive paperwork and a lot of patience on the company’s part.
It’s also expensive. The full registering of a security is likely to cost upwards of several thousand dollars, and many crypto and blockchain-based companies are doing all they can to alter their currencies, so they don’t have to register as securities.
This is ultimately holding long-term results up, but many third-party platforms have emerged designed to ease the burden of registering securities by assisting companies every step of the way. This sudden and general ease may help businesses see the light as to why registration is important, which may lower fees in the future granted more and more companies follow suit and take part.
A New Way of Doing Things
Blockchain attorney and crypto advisor Guido Schmitz-Krummacher feels things should change in the sense that tokens should not be regarded as securities but rather as “existing assets.” He states:
“Products and applications in the blockchain ecosystem will become more and more complex. Therefore, establishing the right internal regulatory strategy can save a lot of money and guarantee the longevity of your project.”