Markets are driven by supply and demand; but investors are driven by appetite versus aversion – cryptocurrencies will learn this lesson in 2019.
In a yearly report released this week by the Global Business Policy Council (GBPC), a strategic service of A.T. Kearney, the team makes ten forecasts for the upcoming year. Taking spot #2 is the prediction that "Bitcoin will lead the consolidation and maturation of the cryptocurrency market."
Underpinning the prediction is the rise and subsequent collapse of altcoins. Bitcoin will steal the show next year as altcoins "lose their luster because of growing risk aversion among cryptocurrency investors."
As Bitcoin is predicted to reclaim two-thirds of the post-crash consolidation and maturation of the crypto market, financial regulators will soften their stance towards the sector.
The U.K. parliament’s Treasury Committee recently released a report in which it detailed its desire to end the "wild west" nature of the markets and pursue regulations intended to stifle criminal activity and reduce price volatility.
Concurrent to the U.K. is the U.S. Security and Exchange Commission (SEC), who the authors believe will warm to the rise of crypto ETFs – especially on the back of the U.S. Commodities Futures Trading Commission (CFTC) working to improve market transparency with the introduction of crypto futures.
If cryptocurrencies are to continue making inroads in the financial sphere, the only way forward is to garner the acceptance of the international financial system that Bitcoin sought to upend. With the recently formed Blockchain Association, big crypto actors have realized this already.
Investor appetite rises as market conditions improve. If the GBPC’s prediction is to come true, the cryptocurrency markets will have to rid themselves of growing pains.