As the year draws to a close, many will look back at 2019 as being rather uneventful in the crypto space.
After all, this was meant to be the year of the institutions (and the trillions of institutional dollars flooding into the industry). Yet, the institutions are still very much at the gates.
There are other developments afoot, however, and some distinct crypto trends that will likely dominate the outlook for 2020 are starting to reveal themselves.
Coin Rivet asked some crypto experts to find out what they believe lies ahead for the coming year.
The top five crypto trends for 2020
1) Increased regulation
“There will be more regulated exchanges and more countries with clearer regulations. Many unregulated exchanges will probably close their doors and appear as a new exchange under a new name, but their influence will not be the same as Binance had in 2017.”
“Such big projects like Libra or TON are going to start global crypto adoption next year, and if the US government won’t let them engage users in the USA, the adoption will start in more crypto-friendly countries, like Singapore.”
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— CryptoLuis (@Cryptonetwealth) December 11, 2019
Mitesh Shah, founder and CEO of Omnia Markets cryptocurrency analytics, stated: “One of the major crypto trends for 2020 is the implementation of regulatory legislation around the world – what I would call a regulatory boom.
“While many countries have already implemented some form of regulation around cryptocurrencies, certain countries, such as the United States, are still debating what regulations are needed and how to best move forward.”
Finally, Jimmy Nguyen, president of the Bitcoin Association and Bitcoin SV champion, concluded: “There will be more government and regulatory oversight of the cryptocurrency industry – which is a necessary step for cryptocurrency to grow into global adoption.”
He also believes that there will be a decline in “anonymity” and dark coins. “It’s become clear those will not survive as the crypto industry matures with legal compliance,” he said.
2) A rise in CBDCs and corporate coins
He said: “Having initially rubbished the potential of cryptocurrencies, central banks across the globe are now engaging in their own internal research… these digital currencies could reduce friction and unlock capital in these massively inefficient financial systems.”
He also added: “Venezuela’s Petro coin made global news but probably not for the right reasons, and certainly not for the benefit of its citizens. China is further down the path to a digital currency with a stream of new legislation and clear bureaucratic commitment. But it’s countries like Sweden (e-Krona) and Uruguay (e-Peso) that may end up being first to launch a credible national cryptocurrency.”
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Steve Good, co-host of The Coin Chat podcast and author of Be Left Behind, said: “This new ‘space-race’ taking place will see governments trying to be the first to market with their own stablecoins whilst also determining how to both regulate as well as encourage business and commerce to progress.”
He believes that this will potentially hamper adoption of cryptocurrency in the short term at least.
“There will continue to be pushback on global stablecoins which are disruptive to national interests. This ‘war’ of national vs global interests will not make adoption as easy as people want, nor will it create the level of adoption people desire, but it will lead to longer-term change and adoption.”
He said: “This is an irreversible tendency that will culminate in the first national digital currencies within a decade.”
3) More decentralised exchanges and applications
Pascal Thellmann, CEO of the CoinDiligent review and guide platform for cryptocurrency investors, believes that 2020 will see a significant rise in decentralised exchanges and dApps, largely caused by regulatory pressure.
He commented: “Scandals like the recent BitMEX email leak, the Bithumb hack, and also the crackdown on cryptocurrency exchanges in Shanghai have truly remarked the value proposition of decentralised exchanges.
“Further, major exchanges are also getting increasing pressure from regulators, which is forcing them to implement KYC and stricter monitoring on its users. BitMEX, for example, is rumoured to roll out full KYC in Q1 2020.
“Hence, I think that one of the largest crypto trends of 2020 will be a major flow of liquidity from centralised OTC desks, derivatives exchanges, and spot exchanges to decentralised alternatives.”
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Fabio Canesin agrees, saying: “We believe that 2020 will see a continuation of the movements started in 2017. As always, we at Nash continue to believe the killer app of blockchain is finance, the application for which it was created. Decentralised finance apps will continue to grow in number and sophistication.”
4) A change to commission-free trading
Digitex Futures founder and CEO Adam Todd believes that the launch of his zero-fee trading exchange in early 2020 will spark a new wave of commission-free exchanges. He commented:
“Once other exchanges begin to see a new class of trader being created that are highly active and add to liquidity, we will see many fee-charging exchanges migrate from their current revenue models and stop punishing their most active traders. Rather like how RobinHood forced incumbent brokers to strip away their trading fees.”
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Shamir Karkal, CEO of payments API Sila and co-founder of American bank Simple – a pioneer in digital banking which was sold to BBVA for $117m in 2014 – also sees this happening, although in the form of large players expanding their crypto offerings.
He said: “Square’s CashApp, Venmo, and RobinHood will all become major competitors in trading – both traditional equities and crypto.”
He believes this will add to the move to commission-free trading as per RobinHood’s model.
5) Continued focus on scaling for real-world use
In 2020, there will be continued work from all the major blockchain projects to ensure their networks can scale for a larger amount of users.
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“The truth is that there are few true ‘users’ of blockchains and cryptocurrencies today beyond speculators. Getting beyond that is the main challenge as we move into 2020.
“For all the cool tech that’s being developed, it will amount to nothing if no one can use it. Even if your platform can process a billion transactions per second, it’s irrelevant if users struggle to perform simple tasks like send or receive funds.”
The Bitcoin Association’s Nguyen didn’t miss the chance to highlight the advantages of Bitcoin SV while pointing out that there will be a “greater focus on the importance of scaling for blockchains” in 2020.
— Jimmy Nguyen (@JimmyWinMedia) December 8, 2019
He added: “Scaling problems have limited the growth of BTC, Ethereum, and other projects. Scaling is needed for any cryptocurrency to become a global digital currency and any blockchain to become a global enterprise ledger.”
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.