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Saying that 2018 was a rough ride for cryptocurrencies doesn’t quite do it justice. The price of BitCoin, for example, fell by over 81% on the year, setting the stage for what could be a critical year for all cryptocurrencies: Is this where prices bottom out, or is there more room for cryptocurrencies to continue the fall?

It’s time for an update. Let’s examine the state of cryptocurrency in 2019 and ask where the major currencies—like BitCoin and Ethereum—might be headed from here, in 2020 and in the years beyond.

Increasing Legitimacy for Cryptocurrencies

According to the CEO of Nasdaq Inc., Adena Friedman, cryptocurrency “deserves an opportunity to find a sustainable future in our economy.” This quote comes as a sign of cryptocurrency’s growing legitimacy: Not only are cryptocurrencies gaining respect from organizations like Nasdaq, but in 2019 and beyond, these currencies may also find real footholds in more traditional business platforms.

That already happened early this year. Nasdaq provides a Bitcoin Investment Trust Stock Chart, for example. Nasdaq has previously invested in cryptocurrencies, such as leading a $20 million round of funding for a blockchain startup known as Symbiont.

These are bits of good news for cryptocurrency after a difficult 2018. With increased legitimacy comes increased demand as a broader swath of older and institutional investors begin to consider the merits of cryptocurrencies in the future. With Nasdaq hosting new indices for cryptocurrencies, the increased legitimacy may also encourage investors to take a more serious look in 2019 and beyond.

Making Sense of 2018

As CoinDesk notes, 2018 was the “worst year on record” for BitCoin, which contributed a total market loss of some $700 billion in total capitalization. After an early drop in February, BitCoin fell relatively steady for the rest of the year before bottoming out again in late November and into December, ultimately approaching prices under $4,000. Although the price has flirted with trips above that number in the time since, it still has yet to consistently show that the bottom is here.

This isn’t unprecedented, however: 2014 was also a poor year for cryptocurrencies, which suggests a history that points to some stamina for currencies like BitCoin. In 2014, the price of BTC fell about 55% from beginning to end—long before the historic bull run that created a new cryptocurrency craze. 

These wild swings might scare off some investors, but they help put cryptocurrencies into their proper context. Those investors who are quick to dismiss the potential of a cryptocurrency may find that even at low prices, BitCoin and Ethereum may have more to stand on than they might imagine. But if we’re going to construct predictions for these cryptocurrencies in 2019 and beyond, we have to use facts beyond mere history to suggest that a rebound may be in play. 

Cryptocurrency in 2019: Predictions and Trends

What’s next? There are a few items that people will want to watch for when it comes to news stories and trends:

  • More “mainstream” or “institutional” money. We’ve previously addressed this in the section on increasing legitimacy for cryptocurrencies. Last year, Fortune magazine saw the same trends possibly emerging. As Fortune noted, even with the price in cryptocurrencies dropping, that doesn’t necessarily mean all the money is going to leave. Like any variable with bull and bear markets, cryptocurrencies could represent a way for investors to make money—which is sometimes reason enough for increased legitimacy. As Fortune notes, the daily transactions for cryptocurrencies have continued to move up, even with the lower prices, which suggests that there’s more interest than the price might indicate.
  • Blockchain startups and new initiatives may thrive. Not only is Nasdaq putting its cryptocurrency money where its mouth is, but PricewaterhouseCoopers has reported that “many of its customers are spending big money on blockchain initiatives,” according to InvestingHaven.com. This is important to the infrastructure of blockchains, as it suggests that more innovation is on the way, but it also suggests that the interest in cryptocurrencies is sustained—and will continue to be sustained—throughout 2019 and longer.

Where is cryptocurrency headed from here? Like calling an individual stock, it’s hard to say where the price will be by the end of 2019. But there’s clearly enough interest in cryptocurrencies to suggest that the permabulls may have to wait a while before they see cryptocurrencies dip truly low. Although you shouldn't rush to get a loan and begin investing right now, you should still keep an eye on the market for cryptocurrencies. With enough demand and more interest in innovation when it comes to blockchains, cryptocurrencies are here to stay in 2019 and beyond.

About the Author(s)

Ting Pen ValuePenguin

Ting Pen is a ValuePenguin Co-Founder. She previously evaluated corporate mergers and acquisitions as a Financial Analyst at Citigroup. Her experience in financial services combined with her entrepreneurial spirit allowed for her to start her own fin-tech company. Her passions lie in problem solving, growth, and travel.

Co-Founder, ValuePenguin.com
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