Brought to you by the Liquid team to help you make sense of crypto.
It has been a rollercoaster year to be a cryptocurrency trader.
We began 2018 with euphoria. Projects were booming, news was spreading and spirits were high.
On January 6 we reached a market cap of USD835 Billion.
But what goes up, must come down – and come crashing down it did.
The price of Bitcoin fell from USD20,000 to USD3000, ICO mania came and went, and hacks, scams and swindles grabbed headlines.
But there was also an impressive amount of bullish news to help believers keep the faith.
Let’s take a look at what happened in crypto in 2018.
Regulators were busy
Regulators took a keen interest in cryptocurrency in 2018.
Back in January, it was reported that South Korea was working on regulations to clamp down on cryptocurrency investments, stating that cryptocurrency investment was an irrational craze.
More than 200,000 residents signed a petition against the proposed clamp down, which led to the government backing down, but still supporting other proposed regulations such as the eradication of anonymous trading accounts.
France made changes to tax laws in April to classify cryptocurrency profits as capital gains. As a result, French cryptocurrency investors now have to pay just 19% tax on their cryptocurrency gains, much more desirable figure than the previous 45%.
In July, South Korea officially legalized crypto and blockchain industries.
The Chinese government confirmed in October that Bitcoin is protected by law due to the nature and economic value of Bitcoin, and the judge confirmed that Chinese citizens have the right to trade Bitcoin at their own risk
China appears to be becoming bullish on cryptocurrency and blockchain.
The Japan Virtual Currency Exchange Association (JVCEA) is a self regulating body in Japan, comprising 16 cryptocurrency exchanges, including Liquid. The Japan Financial Services Agency (JFSA) announced support for the JVCEA in October, allowing the association the opportunity to draw up guidelines for exchange compliance.
Hacks and scams plagued the sector
Bitconnect began in 2016 with an ICO, but came to an end in January after promising high interest rates. This drove the market cap over USD2.6 billion – until the project imploded in spectacular fashion, receiving a cease-and-desist letter from the Texas Securities Board and eventually shutting down operations.
Davor came to light after the demise of Bitconnect, and was a similar lending scheme that left investors out of pocket when the developers called it a day.
While the details are murky and subject to an ongoing legal battle, investors lost USD150 million worth of Nano when Italian exchange BitGrail was hacked earlier this year.
Centra was an ICO promoted by Floyd Mayweather Jr and Dj Khaled, raising USD32 million before being shut down for wire and securities fraud by the SEC.
The founder of Etherdelta was charged was also charged by the SEC, while Paragon (PRG) and AirToken (AIR) had to to return investors; money, register as securities and pay penalties.
Japanese exchange Coincheck was hacked for approximately USD533 million worth of NEM tokens in January.
In June, Bithumb was hacked for around USD31 million in crypto, causing yet more fear and uncertainty.
Advertising bans came and went
Some platforms outright banned crypto advertising this year.
However, since then Facebook has begun allowing companies to apply for the right to advertise their crypto services while Google started to permit regulated crypto exchanges to advertise in the US and Japan.
Twitter has also said no to crypto advertising, although scam ETH giveaways remain a problem to this day.
Big players enter the space
Financial giants continue to look at cryptocurrency with interest.
Nasdaq revealed in April that once crypto matures and regulations become clearer, it would consider becoming a digital currency exchange.
Bakkt is a network for exchanging and storing digital assets being developed by Intercontinental Exchange (ICE), owner of the New York Stock Exchange. The platform will target large institutional investors.
In May it was reported that Goldman Sachs are looking to be the first Wall Street bank to open a Bitcoin trading operation.
Similarly, Börse Stuttgart is on track to launch a crypto trading platform early next year.
Big financial players are definitely taking an interest in crypto, but not all are ready to jump in just yet.
Governments took a closer look
The Bank of America’s annual report released this year didn’t mince words, stating that cryptocurrency is a threat to The Bank of America’s business model and that they will have to adapt their services to compete.
Blockchain and cryptocurrency were talked about in a positive light in the 2018 Joint Economic Report released on March 13 by US congress. The report compared the buzz around blockchain to that of the internet in the 90s, predicting that there will be some spectacularly successful businesses.
Similarly, the European Commission has been supportive of the technology, looking to invest €300 million in projects that are working with blockchain.
Cryptocurrency adoption is steadily materializing through a variety of use cases. If you live in Australia you are now able to pay your bills using cryptocurrencies.
In Venezuela cryptocurrency has been useful for avoiding hyperinflation.
Cryptocurrency is rapidly spreading through Africa in unbanked and underbanked areas.
The fundamentals are there. Cryptocurrency is still an excellent way to move funds.
But we have a long way to go.
Let’s see what 2019 brings.
This content is not financial advice and should not form the basis of any financial investment decisions nor be seen as a recommendation to buy or sell any good or product. Trading cryptocurrency is complex and comes with a high risk of losing money, particularly if you trade on leverage. You should carefully consider whether trading cryptocurrencies is right for you and take the time to learn how trading works and decide how much money you are prepared to lose.
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