2018 was not easy for the cryptocurrency market. Records of the cost, sharp corrections, temporary stabilization of the market — all this forced both critics and adherents cryptocurrency with interest to observe what was happening. What
Already in early 2018, traditional financial institutions began to limit the possibilities of market participants. Many banks from different countries began to refuse to maintain accounts for cryptocurrency companies. In addition, the VISA payment system stopped serving major European cryptocurrency companies. Private customers of many banks lost the opportunity to buy digital assets using payment cards. Such a ban was introduced by the largest banks from the United States, Great Britain, Canada and Australia.
In April, the reserve bank of India (RBI)
Such actions on the part of the financial giants suggest that they began to see in cryptocurrency companies a potentially dangerous competitor, capable of pushing them at the global level. For example, Bank of America this year was first made cryptocurrency in the list of economic, geopolitical and operating risks threatening the bank.
In parallel with this, we see how the largest banks move to the cryptocurrency market. Goldman Sachs, Ing, Barklays and HSBC begin to cooperate with the largest cryptocurrency exchanges and implement their projects. The following is only a few examples.
So, for example, in February, the startup Circle (the main investor is the Goldman Sachs Bank),
Mae reported that the Board of Directors of Goldman Sachs
The largest financial conglomerate of Japan and the fifth largest bank in the world Mitsubishi UFJ Financial Group (MUFG) in September launched MUFG COIN cryptocurrency test among employees of their division in Tokyo. Plans for the introduction of cryptocurrencies to their payment system Bank announced in March of this year, and after only a month announced that the MUFG Coin large-scale testing began in 2019, in which it was already involved in 100 thousand of its customers.
SBI HOLDINGS Together with Ripple, developed a MoneyTap mobile payment application focused on the consumer segment. The application allows interbank payments in real time using Xcurrent technology, in which the XRP token is not involved. MoneyTap has already begun to use several Japanese banks for domestic payments: SBI Sumishin Net Bank, Suruga Bank and Resona Bank. In July, the company announced the beginning of the full work of the cryptocurrency exchange VCTRADE.
Another restriction with which cryptocurrency collided in 2018 is a ban on cryptocurrency advertising projects with such largest Internet giants like Facebook, Google, Twitter, Snapchat, Yandex, Baidu, Weibo, Bing. The WECHAT Chinese Messenger blocked media accounts associated with blockchain and cryptocurrency. Mobile application stores Chrome Web Store and App Store banned applications for mining cryptocurrency.
On the one hand, the blocking can be explained by the fact that blockchas and cryptocurrencies carry a threat to Internet corporations, since they offer alternative decentralized solutions and new forms of mutually beneficial cooperation with token-based users. However, it is possible that the main reason is the restriction of the activities of cryptocurrency companies in countries where corporations are registered.
Nevertheless, in June Facebook announced a revision of a complete ban on advertising cryptocurrency. And at the end of September Google
Meanwhile, other Internet companies seek to integrate new technologies.
The latest version of the Opera browser for Android was
Opera’s competitor, a cryptocurrency web browser Brave, was still loaded in May over 5 million times from the Google Play mobile application store, just 6 months after the intersection of the threshold of 1 million downloads. Brave was created by the co-founder of Mozilla Firefox Brendan Eich.
Yahoo in August
In June, American technological giant Microsoft
And in July, the TRON Blockchain
One of the most noticeable topics since the summer was the question of whether the Securities and Exchange Commission (SEC) will allow cryptocuridant stock exchange funds (ETF). Waiting for ETF in the US is comparable with the waiting for the launch of futures on CBoe and CME in 2017.
In January, SEC has expressed serious doubts about liquidity and price volatility cryptocurrency and related products and asked the companies that submitted applications for ETF, withdraw them. However, due to the fact that since the beginning of the year there was a stabilization of the market, from April there were reports of new applications. Since that time, applications filed:
While the regulator transfers the decisions on request and encourages to participate in the discussion of this issue. The crypto community was expressed that decisions will be postponed for the maximum period — until the beginning of 2019. In addition, many express the view that stock funds negatively affect the cryptocurrency market.
Meanwhile, in August, another similar financial instrument was launched as an alternative to the Nasdaq Stockholm Stock Exchange — stock notes (ETN) to Bitcoin, developed by the Swedish company XBT Provider AB.
It was expected that 2018 will be the year when countries are determined with the regulation of the cryptocurrency industry and will create relevant legislation. Indeed, in many countries, on all continents, a discussion of this issue is actively underway, bills are being prepared. Some countries seek to limit the development of industry, due to difficulties in countering the use of cryptocurrency in money laundering and controlling digital assets in general, against the background of active growth in the cryptocurrency market. Other countries in opposite seek to attract industry representatives and stimulate its development, seeing the opportunity for its economic growth.
A vivid example of the latter is Malta. July 4 Parliament of the country
Earlier, February 27, the Federal Ministry of Finance of Germany (BMF) signed a decision on the recognition of Bitcoin by a legitimate payment facility, having equated it to traditional fate currencies and freed from taxation. Conversion of fiat ground currencies in bitcoins is not taxed. Also BMF does not intend to regulate the mining industry. Thus, Germany became one of the first European countries defined with regulation.
Discussions of regulation throughout the year are also carried out at the interstate level and the level of international organizations, in particular at the level of «big twenty» (G20). Large expectations were pinned at the G20 summit in July in Buenos Aires. It was assumed that concrete recommendations on the regulation of cryptocurrency will be offered. But the presentation of the standards of applying the rules to counter money laundering (AML) against cryptocurrency was postponed until October. If they are presented, they will play an important role in the formation of legislation and regulation of the cryptocurrency industry of individual countries.
In 2018, they spoke about the entry into the market of institutional players. According to
Many companies began to offer a wide range of products oriented in institutional investors. Various companies began to offer custodial services for cryptocurrency. Among them Nomura, Coinbase, Bitgo, Versabank. Also, various large capital services for working on the cryptocurrency market are offered Coinbase, Intercontinental Exchange (ICE), Caspian, Huobi, Nasdaq, Ernst & Young, Bitfinex, Crypto Fund AG (SWISS Crypto Finance Group subsidiary), LMAX Exchange Group, and many others .
Since many institutionals are often interested in buying / selling large cryptocurrency, which is hard to perform on ordinary trading and exchange sites, during the year the opening of a multitude of cryptocurrency OTC platforms as cryptocurrency companies and companies with a traditional financial market were announced. In particular, BCB Group, Otcqx, Gemini, Jump Trading, Kraken, Blockchain, Etoro.
But the OTC market also attracts other players. Many miners prefer to sell the extracted cryptocurrency outside the stock exchange. For startups, completed ICO, it is also a convenient way to sell the collected cryptocurrency for Fiat to implement its project.
According to the report of the International Research Company TABB Group, Outdoor (OTS), the Bitcoland market is at least 2-3 times more in terms of volume than stock. Considering that the Bitcoland’s exchange market processes about $ 4 billion a day, then over-the-counter, according to TABB calculations, handles more than $ 12 billion per day on an ongoing basis. At the same time, analysts believe that these transactions are not noticeable in the blockchain, since the bitcoins themselves are moved, and the private keys from wallets.
Despite the fall in prices, cryptocurrency and reducing market capitalization, in 2018, more ICO has already been conducted than in the previous one: 741 against 514, according to ICOBox researchers as of the beginning of October. And funds collected almost 3 times more: $ 18.16 billion against $ 6.89 billion.
The most sensational was the ICO of the Telegram Messenger, which collected $ 1.7 billion during a closed round of $ 1.7 billion and refused by the public stage. The founder of the Messenger Pavel Durov considered that there were no fundamental tools and the need for a wide public campaign. Although the media reported earlier that the project was going to collect $ 3-5 billion.
Nevertheless, of course, ICO is losing popularity. According to the DIAR research team, 70% of ICO tokens today are less than during sales. Moreover, most of the tokens fell in price by more than 90% of their peak values. DIAR believes that this contributed to an increase in attraction to blockchain and cryptocurrency startups of venture capital. Only in the first three quarters of 2018, venture capital investments accounted for $ 3.9 billion, which is 280% more than 2017 indicators. At the same time, the number of investment transactions for incomplete 2018 is almost doubled.
In addition, some companies began to offer alternative forms of attracting investments in the light of the fact that many ICO organizers showed unscrupulousness or at all turned out to be fraudsters. So, they spoke about the primary offer of Security-Token (SECURITY TOKEN OFFERING — STO) as a safer means of collecting funds. Although potentially STO can derive the entire blockchain-industry to the level of the global stock market, until it has become widespread, and only ingenious cases are known. Among them: Good Money, Spin, Overstock Tzero.
Considering the foregoing and despite the fact that ICO is a simpler and fast way to attract investments for startups, many cryptocurrency companies in 2018 decided to turn to traditional methods and spoke to conduct an IPO. Probably, another reason is that the IPO guarantees higher investment safety, which means more attracts large capital. But so far in 2018, only one participant in the cryptocurrency market has managed to conduct an IPO, the rest only filed applications or reported plans. First of all, companies related to the mining cryptocurrency were distinguished.
At the beginning of August, Argo Mining Plc’s IPO was held, which offers its users the possibility of remote mining cryptocurrency. Companies managed to collect £ 25 million (about $ 32.5 million).
At the end of September, the largest mining company Bitmain filed a listing application for the initial public placement for consideration of the Hong Kong Stock Exchange (HKEX). Listing will take place either in the last quarter of this year, or in the first quarter of 2019.
Other companies also stated about the plans of the IPO. So, in September, the developers of a mobile application for cryptotrading RobinHood reported this. This is despite the fact that in May, the company’s capitalization reached $ 5.6 billion after the Round of Financing D.
Canadian Public Company Govermedia Plus Canada Corp. Signed a memorandum of intent with the ExMO cryptocurrency exchange, which provides it with exceptional rights to negotiate the purchase of the last for 180 days. If the transaction takes place, the combined company will continue to conduct business under the EXMO brand and will be quoted on the Canadian Stock Exchange (CSE).