Predictions are that it could be a quiet year on the price front, with any positive serious movements only coming in the second half, despite the blip we’ve had in the last week. Throughout the bear market of 2018, the blockchain space was working hard to make a comeback. It’s not all doom and gloom, as the media would sometimes have you believe, and there’s still plenty to be positive about looking ahead to the rest of the year.
Regulation and institutional investment
The US Securities and Exchanges Commission’s (SEC) restrictions in the crypto space have greatly restricted crypto development and adoption in many areas, and where the US goes other countries often follow. China and India, the two most populous countries in the world, also imposed hefty restrictions. As governments are trying to make sense of this nascent technology, and amid a plethora of scams, it’s logical that they are trying to put the brakes on for a while. Decentralised cryptocurrencies cannot be stopped, but some approval and cooperation with governments will make for a smoother adoption path. While several bitcoin exchange traded fund (ETF) applications were rejected last year in the US, there’s hope that sometime this year approval will begin. There are currently 2 applications currently sitting on the SEC’s table (by VanEck/SolidX and the Chicago Board Options Exchange), which could prove to be important test cases for 2019.
Another financial product in the pipeline that is hoping to bring in new investment from the traditional financial sector is an exchange for crypto derivatives founded by ICE (Intercontinental Exchange - NYSE’s parent company) called BAKKT. According to their website “Bakkt is building an open, seamless global network to enable you to buy, sell, store and spend digital assets simply, safely and efficiently.” In addition to this, BAKKT has partnerships with Starbucks and Microsoft, helping to improve its proposition potential. Originally planning to launch in January, it has been delayed due to a variety of factors. However, once it’s up and running later this year (hopefully), it’ll be interesting to see whether the expected adoption among institutional investors materialises.
New moves in accessibility
Another thing we need to see for greater adoption is easier accessibility to the crypto space and easier ways to use cryptocurrencies once we have them. One big area where we can see that starting to happen is with the development of blockchain-capable mobile phones. Samsung has just announced that its new Galaxy S10 phone will come with a built-in wallet for cryptocurrencies. That follows on from the EXODUS 1 crypto-enabled phone already launched last year by HTC. What the Samsung phone also allegedly includes is a private crypto key storage facility. This very useful tool solves one of the main problems of owning decentralised currencies, which is that we are solely responsible for holding and protecting our own private keys, which, if lost, mean that the crypto is lost forever too. And this is very easily done - “write your private keys on a piece of paper,” they say, “and keep the paper in a safe place,” they say. Many people have already lost that piece of paper, and I saw this as one of the downsides putting people off moving to cryptocurrencies.
However, this problem could now be solved by Samsung. In their press release, they state that the “Galaxy S10 is built with defense-grade Samsung Knox, as well as a secure storage backed by hardware, which houses your private keys for blockchain-enabled mobile services.” While I am still concerned that these private keys could be accessed by someone, Samsung promises that their new Exynos system-on-chip technology includes something called a physically unclonable function.
In my opinion, it’s features like this that will eventually bring crypto to the mainstream. Surely it’s only a matter of time before Apple and other mobile phone manufacturers include similar options - this has to become the norm. Once more people hold cryptocurrencies in their phones, I believe more traders will start to accept them. This could then create the tipping point to mass adoption that many of us hope for.
There are undoubtedly still many hurdles in the way of mass adoption, but sentiment in the crypto space seems to be bullish and, although it is likely to take time, the new developments we can see should be a cause for optimism.