2019 will likely prove to be a pivotal year in the cryptocurrency space. Here are five reasons why:
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1. Bitcoin ETF Launches
Finally, it appears that the Bitcoin ETF will become a reality in 2019. After simultaneously rejecting nine Bitcoin ETF proposals in August 2018, the SEC is poised to potentially issue an approval in 2019.
The U.S. Securities and Exchange Commission (SEC) has made clear it is not making a judgment on the value of Bitcoin and the blockchain. "We emphasize that our disapproval does not rest on an evaluation of whether bitcoin or blockchain technology more generally, has utility or value as an innovation or an investment," the SEC stated.
The good news is that the ETF pending approval is not tied to the Bitcoin futures market but rather the value of Bitcoin itself. This is why I am so confident of the approval happening this year.
Known as the VanEck/SolidX Bitcoin ETF, it is scheduled to be approved or denied by the SEC on Feb. 27, 2019.
2. Goldman Sachs Embraces Blockchain
Scrolling through my Instagram feed, I was surprised to see an extensive blockchain marketing campaign by the venerable investment bank, Goldman Sachs.
Usually avoiding promoting anything to do with blockchain or crypto assets, this moves a definite shift of perspective in the institutional world. Goldman is using its Instagram account to educate about blockchain's enormous potential.
The move just adds more fuel to the institutionalization of blockchain fire. It is signaling that the blockchain/crypto asset craze is here to stay!
3. India Moves To Legalize Cryptocurrency
It looks like the crypto-winter in India will soon end as the government is seriously considering lifting the ban.
The ban was instituted by the Reserve Bank of India, the country's central banking institution, which prevents lenders from dealing with cryptocurrency. According to Bloomberg, the ban effectively outlaws the industry in Asia's third-largest economy.
Adding to the ban's strength, India's top court supported the legislation in mid-2018. G.V. Anand Bhushan, a partner at the law firm Shardul Amarchand Mangaldas & Co., explained the ruling, saying: "Nobody can price the risk currently. The minute you have clarity on exchanges, and whether digital currencies can be used as a medium of exchange or payment, or if it is a commodity, there will be less speculation and much more stability in pricing."
The second interdisciplinary committee, established by the Indian government, came out in favor of legalization. A senior official who attended the committee's recent panel meetings told The New Indian Express, "We have already had two meetings. There is a consensus that cryptocurrency cannot be dismissed as completely illegal. It needs to be legalized with strong riders. Deliberations are on. We will have more clarity soon. The committee has met twice on the issue and is likely to submit its report to the finance ministry by February next."
Should the process lead to legalization, as expected, I think there will be widespread adoption of cryptocurrency in this soon-to-be significant market. No matter how you look at it, this is a very bullish happening!
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4. Superman Backs BAKKT
One of the wealthiest people in the world, Hong Kong billionaire Li Ka-Shing, AKA "Superman," has backed the much anticipated BAKKT Bitcoin Platform. Other investors in this revolutionary tool include Fortress Investment Group, Pantera Capital, and Susquehanna Investment Group.
Created by the operator of the Intercontinental Exchange (ICE), BAKKT acts as the missing link between Bitcoin and the real world. Leveraging Microsoft's cloud, BAKKT creates an open and regulated ecosystem for digital assets. I am incredibly excited about the pending launch of BAKKT in 2019. Leading merchants such as Starbucks are on board.
Maria Smith, vice president of partnerships and payment strategy for Starbucks, said: "As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into US dollars for use at Starbucks. As a leader in Mobile Pay to our more than 15 million Starbucks Rewards members, Starbucks is committed to innovation for expanding payment options for our customers."
Not only does BAKKT provide a seamless connection between merchants and digital assets, my bet is that it is the impetus needed to make Bitcoin genuinely mainstream!
5. Ethereum Hard Forks
Ethereum's Constantinople hard fork is scheduled to arrive on Jan. 16. Much lauded as the next step to make mining obsolete, as well as improve security, functionality, and scalability of the network, Constantinople acts as the bridge between proof-of-work (PoW) and proof-of-stake (PoS) protocol. Any change that improves the efficiency of the world's second favorite cryptocurrency should have bullish implications on the market.
Risks To Consider: Despite the institutional involvement, cryptocurrency remains highly speculative. Over 90% of the Altcoins have turned worthless as the hype subsides. While opportunity remains in the most popular digital assets, only invest money that you can afford to lose in the space.
Action To Take: I see 2019 as a pivotal year for cryptocurrency. While even more coins and tokens will drop off the map, I expect the leading capitalized assets to find a bottom in 2019 and start another monster run higher. Watch XRP, LTC, ETH, BTC, IOTA, and TRON!