Co-founder of cryptocurrency exchange EXMO Ivan Petukhovsky has predicted that 2019 will be characterized by bearish stock market movements and increased interest in cryptocurrency, leading to enhanced crypto liquidity. In an article published earlier today on the official EXMO blog, Petukhovsky predicted that “garbage assets” in the cryptocurrency market will disappear, and deployment of comprehensive regulations will boost the popularity of crypto assets.
According to him, the ongoing bear market which started in 2018 is a period for “purification” as the market gets rid of scam coins and crypto projects with no genuine utility or innovation. He believes that once this phase ends sometime this year, ICO fundraising markets will recover, driven by enhanced investor confidence in the high-quality digital assets left surviving.
Combined with bearish equity markets which he expects to last for most of 2019, this will lead to an influx of investment into crypto assets, ultimately resulting in enhanced liquidity and bull movements.
Development of Regulatory Frameworks
Petukhovsky predicts that 2019 will also herald the long-awaited entry of institutional investment into the cryptocurrency market, as legacy financial institutions and cryptocurrency companies collaborate increasingly.
According to him, the regulatory hostility that has previously dogged crypto is already starting to dissipate as regulators increasingly see the asset class as an investment opportunity that should be regulated, rather than a threat to be assessed and contained. In his assessment, a number of regulators in important financial jurisdictions are already starting to come round to this point of view.
An excerpt from the post reads:
“We have received a clear signal from the regulatory authorities of various countries, including the SEC, stating that the cryptocurrency markets and the ICO should be regulated. This trend will only increase with the development of the industry.”
The development of positive cryptocurrency regulation in his view will then lead to increased interoperability of crypto and fiat financial networks in 2019. International regulatory standards he says will provide an opportunity for financial institutions and crypto companies to feed off each other’s potential, whether in terms of leveraging established financial infrastructure on in gaining investment exposure to crypto assets.
Market Consolidation and Liquidity Growth
Petukhovsky also believes that 2019 will see a rash of mergers and bankruptcies within the cryptosphere as companies adapt to a new reality which does not have the promise of outsized profits or easy access to capital as there was during the ICO mania era. Some big players, he suggests, will step into fiat capital markets through IPOs in order to access capital.
He believes that the removal of poor projects from the crypto market and the entry of legacy capital through acquisitions and traditional shareholdings will lead to an unprecedented situation where heightened investment interest will be juxtaposed by a newfound understanding of blockchain and cryptocurrency as a tool of the future, instead of a get-rich-quick scheme, as some have seen it in the past.
Summing up his thoughts on the year ahead he says:
Due to the trends described above, we predict an increase in the liquidity of the market of crypto active assets, their wider penetration among the broad masses of the population and the inflow of institutional capital in the form of investments, as well as the emergence of new crypto tools secured by real assets. Similarly, the fall in stock markets encourages many investors to enter the crypto market, the collapse in traditional markets is forcing investors to take profits and look for new investment opportunities.