Three top fintech investors have given their predictions for what 2019 may have in store for cryptocurrencies and blockchain technology.
1. Fred Wilson – Union Square Ventures
Wilson anticipates that cryptocurrencies won’t become a haven from volatility and negative price action in the stock markets in 2019, instead, he sees:
‘…major dislocations in the leadership of the United States, a bear market in stocks, a weakening economy, a number of issues with the global economy including a messy Brexit and a sluggish China’ leading to ‘…a more cautious stance by investors in the startup economy. And crypto will not be a safe haven for any of this although there will be signs of life in crypto land in 2019.’
Despite a potentially negative outcome from traditional stock market turbulence, Wilson does expect the current crypto bear market to bottom out sometime this year.
‘I think this bottoming out process will end sometime in 2019 and we will slowly enter a new bullish phase in crypto.’
2. Paul Veradittakit – Pantera Capital
Amongst his many professional experiences, Veradittakit has witnessed new trends emerging from the digital asset fundraising space; with blockchain and crypto utilizing companies having the ability to raise new funds through selling shares, as opposed to issuing new tokens.
‘…companies that raised capital using the initial-coin-offering structure either have managed their treasury poorly or realized that they haven’t found a strong use case for their token — they are in need of more capital and to raise an equity round.’
Three key ‘themes’ to watch out for in 2019 include:
- The institutionalization of the crypto space. More mass-industry adoption, fully regulated products, security token issuance and more.
- Developers delivering user-interfacing apps that are user-friendly and compliant, such as on-ramps (fiat into cryptocurrencies or stablecoins).
- Companies building on top of decentralized protocols, such as Augur – and Ethereum-based prediction marketplace protocol.
3. Anthony Pompliano – Morgan Creek Digital
‘Pomp’ expects crypto hedge funds to continue suffering from what in fundraising and financial management circles is known as ‘high water mark issues’, which refers to contractual clauses ensuring that ‘fund managers only receive their performance fee … if the fund’s net asset value is higher today than in any previous investment period.’
As a result of Bitcoin peaking at nearly $20,000 in December 2017, both Bitcoin and altcoins have suffered significant losses; a fact that hasn’t escaped Pompliano.
‘We have seen 50-80% decreases in net asset values in some funds since then.’ ‘This means these fund managers will not receive a performance fee in 2018, which drastically reduces the income of the individual manager.’
Whatever happens in 2019 for the cryptocurrency and blockchain ecosystem, it sounds like 2019 will be as entertaining to watch as it is dramatic to experience! Make sure to check out our other articles and news stories on everything crypto and blockchain to get the latest news and insights.