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Wednesday, January 2, 2019

January Crypto Outlook: Why the Future Lies in Stablecoins...

Happy New Year everyone! January is underway and it’s time for your Crypto Outlook provided by Contentworks, an agency specialising in financial services marketing. After months of sharp declines, the price of cryptocurrencies stabilized slightly in December with Ethereum gaining by more than 20%. Bitcoin and Ripple too recovered some of their earlier losses but ended the month slightly lower. Still, the market capitalization of cryptocurrencies is significantly far from where it was a year ago. According to Coin Market Cap, the currencies have a market cap of more than $130 billion.

The decline of cryptos happened because of a series negative news from all the major markets. This news included a regulatory crackdown, a ban on cryptocurrencies advertising, increasing cases of fraud, and the forking of Bitcoin Cash. It was also because many developers stopped looking to improve their platforms. Instead, focusing on the amount of money they could make from them.  On a positive note, cryptocurrencies were not the only laggards in the market. In fact, all the major stock indices declined as the trade conflict raged on. The same is true for other commodities like crude oil, soybeans, and corn that saw double digit declines. The chart below shows the performance of key global indices in 2018.

As a content marketing agency specialising in financial services and cryptos, we can say that the decline of cryptocurrencies was likely a blessing in disguise. This is because as the price of the cryptocurrencies gained in 2017, more useless cryptocurrencies were created and termed sh*tcoins in the sector. A good example was that of Useless Ethereum Coin that raised almost $50,000 despite telling investors that it had no value. Therefore, the decline will leave in place more advanced cryptocurrencies with better tokenomics and more serious advisors.

A trend that will likely continue this year will be the development of stablecoins. Stablecoins are cryptocurrencies that are pegged to assets like a currency, a commodity, or an Exchange Traded Fund (ETF). Already, large companies have expressed interest in this industry. In December, it was reported that Facebook was thinking of developing its own stablecoin to help it develop money transfer capabilities for Whatsapp. An irony that hasn’t escaped us given the crypto advertising ban imposed by Facebook itself. In the fourth quarter, the famous Winklevoss brothers launched Gemini dollar, a stablecoin that is backed by the dollar. This coin enables people to send and receive US dollars through the blockchain network.

Another trend that could happen this year will be the entry of large companies in the industry. Last year, Blackrock announced that it was considering getting into the industry. This was followed by the launch of a cryptocurrencies trading platform by Fidelity. The service will offer custodial services for large investors. All this means that this could be the year of acceptance for the cryptocurrencies by large investment firms.

Events in January
This month, investors will focus on several key crypto events. On January 11, the Blockchain Connect Conference will take place in San Francisco. This event will be attended by representatives from companies like Oracle, Binance, Accenture, and Lightspeed Ventures. It will be followed by the BlockChainge event in Washington DC that will be attended by policymakers and key entrepreneurs.

Other key events that will happen this month will be Unlock Blockchain Forum in Dubai, the North American Bitcoin Conference in Miami, Chainers Blockchain Week in South Korea, and Crypto Pro Expo in San Francisco.

At Contentworks, our team of financial professionals closely follows market movements for FX, Crypto and other tradable instruments. We are proud to serve some of the biggest crypto and fintech companies in the world by delivering high-impact articles, videos, PR and white papers.

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Information provided via press release