After trading sideways since late summer/fall, BTC made its long awaited move. Unfortunately, it did not move where we were hoping. When an asset trades sideways, it indicates a big move coming. This led many who had been beat up during 2018 to hope for positive movement.
Positive thinking can only get us so far.
A lot of great news has come out this year to support the growing infrastructure of crypto currency. It has not resulted in the price movements that we grew to expect coming out of 2017’s Bull market. In fact, the crypto market has never looked this promising from an FA perspective. Go back to 2017 and the crypto market didn’t even have custody arrangements secured yet. As you know, custody is one of the most important things for large financial firms. Custody of the asset allows these firms to create asset class holdings for their clients governed by financial regulations.
Focus on the use case.
2018 will be remembered as a great year for crypto currency due to the large gains in infrastructure, regulations and the beginning of stability. It’s a watershed year of necessary measures if crypto is ever going to be mainstream. The underlying message this year that a lot of crypto may be forgetting is there needs to be a compelling use case established for Main Street as well as Wall Street. Not just promises, theories and Early Adopter tech-geek level interest. The question we all need to answer is simply, “what will the killer application of this technology end up looking like in order for crypto to become widely used?”
Speculation vs. Real Growth
Speculatory markets are fun, volatile ways to make a lot of money in very short time periods. For most investors, they view these investments as gambling. As we get through 2018 and look at 2019, we will need to start seeing the foundational changes begin to deliver results. If we continue to see large firms testing out different solutions, it’s a good sign. If we continue to see them loosely implement them or not roll them out to the public, it’ll be another long year.
My money is on 2019 leaning towards wider adoption but mixed results as we continue to see the market mature.
2018 Short Term Outlook
My personal expectation is that BTC drops further and 2019 will be a continuation of the decline we saw this year. There will be short term trades available to take advantage of, but I think we will see the overall market cap continue to decline as the market forces go to work. These market forces should hopefully eliminate bad ICOs, weak alt coins and projects that haven’t delivered. In order for the crypto market to return, there will need to be some thinning of the herd as victors are chosen. 2018 has already done some of this painful work, but more will be needed.
Doom and Gloom?
Not at all. This is simply a sober look of low expectations for the market going forward. The technology is very real and will solve problems. It is the future. We will just have to set our expectations realistically. Dollar Cost Averaging for the long term, close stops set for short term trading. We are able to get excellent entry points in down markets. Accumulate your holdings and sit tight.
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