The biggest crypto stories of 2019 - OhNo "WTF" Crypto

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The biggest crypto stories of 2019

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It’s never a slow year in crypto and 2019 was no exception. In this year-in-review, we highlight the biggest stories of the year and look ahead to new developments in 2020.

Bakkt launches Bitcoin Futures

The most anticipated new bitcoin trading platform in 2019 was the launch of ICE-backed futures exchange and crypto custodian Bakkt. While trading volumes were slow to pick up initially, Bakkt has continued to hit new all-time high trading volumes in Q4/2019.

For 2020, Bakkt will provide an institutional on-ramp into bitcoin. Whether institutions arrive in meaningful numbers or go long or short bitcoin remains to be seen.

SEC says no to Bitcoin ETF (again)

Another year, another “no” to a Bitcoin ETF from the SEC. There have been several attempts in the past twelve months to get a Bitcoin ETF across the finishing line. However, all applications have been turned away.

The SEC’s current stance suggests a Bitcoin ETF remains several years away.

Facebook announces Libra

Perhaps the biggest market-moving headline this year was the announcement by Facebook that it plans to launch its own digital currency, Libra. The price of bitcoin rallied to a 2019 high on the back of renewed interest in cryptocurrencies after Facebook went public with its intention to launch Libra.

Lawmakers and regulators, however, were dubious at the prospect of corporate-issued digital currencies that could compete with national currencies. Hence, we expect Libra to face more regulatory pushback in 2020.

China loves Blockchain, not Bitcoin

Chinese President Xi Jinping announced that the People’s Republic must make a “greater effort” to develop and implement blockchain technology to gain a competitive advantage over other leading economies. With China going “all in” on blockchain we expect a wave of blockchain-positive news coming out of the Asian country.

However, China’s love affair is with blockchain and not cryptocurrencies. Cryptocurrency businesses continue to face difficulties in the People’s Republic.

China to launch CBDC

China is poised to become the first major economy to launch a central bank digital currency.

A blockchain-powered, central bank-issued digital yuan is expected to deploy in the first half of 2020, with other economies to follow.

Central bank digital currencies

While China will likely become the first major CBDC issuer, dozens of central banks are reportedly researching the validity of issuing their own blockchain-powered digital currencies.

From the ECB to the Bank of Kora, central banks are warming up to the idea of issuing sovereign virtual currency to provide them with an increased ability to manage their currencies.

Trump Tweets about Bitcoin

US President Donald Trump impressed the world with his nuanced view on cryptocurrencies when he tweeted, “I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated crypto assets can facilitate unlawful behavior, including drug trade and other illegal activity.”

He also took a shot at Facebook’s Libra to demonstrate his anti-crypto, pro-dollar stance. In 2020, we expect his views on crypto to remain the same, which may impact crypto regulations in the US.

The Bitcoin stock-to-flow model

The Bitcoin stock-to-flow model, created by crypto analyst “PlanB” was a major talking point amongst crypto investors in 2019. The model suggests that scarcity is a key driver of the price of bitcoin.

While not all analysts agree with the validity of the model, it will remain a key narrative with the Bitcoin block reward halving event taking place in May 2020.

Ethereum upgrades

In December, the Ethereum network finally performed its “Istanbul” hard fork, which is intended to improve the blockchain’s speed, efficiency, and scalability.

In 2020, we expect to see ongoing upgrades to the Ethereum blockchain providing the building blocks of what will become Ethereum 2.0, the new-and-improved version of the Ethereum network.

Jack Dorsey launches Square Crypto

Bitcoin advocate and Twitter CEO Jack Dorsey launched a new venture, Square Crypto, to build on top of the Bitcoin blockchain. Despite going on a blockchain hiring spree, we do not know much about what the company has in store yet.

However, going by the success of the Cash App, we expect Square Crypto to be a net positive for bitcoin in 2020.

Binance.US launches

Digital asset exchange behemoth Binance launched a new exchange, called Binance.US, to cater to US customers, who are increasingly being locked out by other exchanges due to the challenging regulatory environment in the US.

Binance.US has seen substantial user growth and is expected to become a major player in the exchange landscape in the US in the coming year.

Bitcoin dominance

Bitcoin’s increase in market share of the overall crypto asset market cap, referred to as bitcoin dominance, grew in 2019. As the price of bitcoin recovered somewhat, the majority of the altcoin market failed to keep up, cementing bitcoin’s dominance as the number one cryptographic asset.

While views are mixed on whether we will witness an “alt season” in 2020, we expect bitcoin to remain the most dominant asset in the coming twelve months as altcoin projects struggle to attract users.

Bitcoin’s hashrate moons

While the price of bitcoin (BTC) has not returned to its 2017 highs, bitcoin’s hashrate achieved new all-time highs in 2019.

Bitcoin’s “mooning” hashrate suggests that miners expect the value of bitcoin to increase in the future and are deploying new capital to mine the world’s leading digital currency.

The Bitcoin block reward halving

While the next block reward halving is not until May 2020, the halving was a major talking point among bitcoin investors in 2019. The majority believe that the price of bitcoin will rally post-halving, which has been the case historically (due to the decrease in the new supply of BTC). Others believe the halving is priced in and will have a negligible effect on price.

We expect the havling to be a major theme of discussion for crypto investors in 2020.

Ongoing exchange hacks

Despite cybersecurity being a major focus for crypto asset exchanges, the sheer number of exchange hacks in 2019 show that hackers remain a step ahead.

It is unfortunate to see that exchanges continue to suffer losses. This will almost certainly still be the case in 2020, so make sure not to keep large holding on exchanges.

IRS sends “Love Letter” to Coinbase Customers

The taxman sent a letter to suspected cryptocurrency holders in the US “informing” them to get their affairs in order when it comes to their crypto tax payments. The list of recipients is likely composed of the Coinbase users whose data the IRS received after a successful “John Doe” summons in 2018.

In 2020, we can expect more tax offices to go after crypto investors who they believe have not been honest in their capital gains tax declarations.

DeFi takes off

In the world of Ethereum, 2019 was arguably the year of decentralized finance (DeFi). The second-largest blockchain network has become home to decentralized financial services, such as decentralized lending, trading, and stablecoins.

We can expect the DeFi market to grow in 2020, which should benefit the Ethereum ecosystem.

STOs slow to take off

Many industry experts predicted that the security token offering would replace ICOs and become the new go-to funding model for blockchain (and non-blockchain) startups. However, STOs have been slow to take off in 2019.

A lack of regulatory framework, the emergence of IEOs, and the poor performance of the majority of newly issued tokens in 2018 and 2019 have made it difficult for STOs to find footing.

US Court rules against Craig Wright

Self-proclaimed Bitcoin creator Craig S. Wright had a Florida-based court rule against him in his high-profile case against the Kleiman estate. The court ordered Wright to hand over half of the bitcoin he allegedly mined with the late Dave Kleinman.

However, to do so would mean Wright would have had to be part of the Satoshi Nakamoto team and have access to the coins. If that turns out not to be the case as most suspect, Wright will have a difficult time adhering to the court’s order.

New Zealand legalizes crypto salaries

New Zealand officially legalized crypto salaries after the nation’s Inland Revenue Department (IRD) declared that cryptocurrencies such as bitcoin and ether can be accepted as salary payments under the Income Tax Act.

See you in 2020 for more crypto market news and analysis.



Alex Lielacher, Khareem Sudlow