2017 have been a huge year for Bitcoin and Crypto world. The prices have surged, the Market cap too. The ICO number have exploded and we have now more the 4000 coins available with an incredible amount of new ICO coming for 2018.
What is interesting with Bitcoin and Crypto, is that it’s a completely different market from the excising one (FX, Bond, Commodities or Stocks). It was created by people who didn’t trust the system: Banks, Market, Regulator…. It is more volatile, with coin quoted on hundreds of Market whit different price on each of them. This difference is inherited on how Bitcoin and crypto have grown on the past 10 years. Most historical “Crypto trader” come from a Technical background then trading one and didn’t bother implementing system with same constrain as the Financial market need to do due to client and regulatory requirement. The ecosystem has grown without control, rapidly to be the first and try take advantage of this new “Currency”. Most were investing for speculation purpose.
On past few day, as the street look at crypto trading more in detail, I start to read in newspaper that Bitcoin and Crypto trading are broken. They are far from being a tradable asset and should be regulated and transformed so (like for other asset) will be less volatility, same price over all platform, more control on them and on the platform to avoid hacking and loss. Issuer and platform should be responsible so investors are protected in case of crash or hacked. This will be a pre-requisite before the street (who want safe investment) and institutional investor can enter the market. Investor in Crypto should be protected and only “Professional Advisor” should be allowed to trade them.
Those view raised several questions on the future of Bitcoin and crypto trading:
- Is it how the Bitcoin / Crypto community (Developer / Miners / initial investor) want the ecosystem to evolve? Will they “rebel” if too heavy regulation / control come on their road?
- Do we need another “vanilla” asset only tradable by professional where the entry barrier will be controlled by the establishment (regulator and bank)? Is there no space for high volatile and risky investment (until Bitcoin and Crypto stabilized by themselves)?
- How this will impact ICO? They were created to avoid the complexity of IPO process or the VC selection. Will they still be able to raise as much cash as they do and try developed disruptive solution if controlled by bank or VC?
Answer to those points are complex and will drive where crypto trading is heading.
It has several and complex ramification such as:
- At which level should we protect investor, is each of us should not be able to own his asset and made his own decision?
- Should it be controlled at country level? Global level? Not at all? And can it be controlled?
- Should ICO / Coin be controlled to insure when and how they reward investor (and not only speculative coin)?
Those are just part of questions and issues that aroused with crypto coming to the light. The list is too long to have it here but happy to discuss it separately.
2018 should start to bring some answer to those questions with a high volatility along the road…
And you what your view? Where Bitcoin and Crypto are heading? An other standard asset classed reserved to an “Elite” or the current free - to lose or win – investment?