Although Bitcoin tanked during the last year, the future of cryptocurrencies is still bright, as progress cannot be stopped. This is the assessment of Travis Scher, the vice president at crypto investment firm Digital Currency Group.
According to the vice president of Digital Currency Group, the future year is going to be volatile, entertaining, as well as full of surprises, adding that he is confident that the stress which the crash in 2018 caused is going to lead to even higher growth.
He also admitted that last year has been a challenging one for cryptocurrencies. He mentioned that there are several good reasons for pessimism and disillusionment at the future
But, he also said that the crypto community is addressing fundamental underlying problems which have held it back. He also outlined the steps which the industry has to take to bolster its credibility, as well as move toward mainstream adoption.
Crypto industry has to engage with regulators
First of all, it is critical for the industry actually to work with lawmakers in order to adopt appropriate regulation in the future. Doing that is going to promote the legitimacy of the sector, hence advance mainstream adoption too.
According to Scher, regulation is the most significant topic in the crypto industry in the future. How regulators decide to treat crypto assets and crypto companies is going to be a huge determinant of the success of the industry.
According to some reports, this is the reason why Digital Currency Group, Circle, as well as Coinbase launched a pro-crypto lobbying group in September last year. This also shows that the industry is quite serious about working with regulators to protect consumers, and in that way, earn mainstream acceptance in the future.
The industry will have to proactively and effectively make the case that this industry can be a powerful force for good.
The co-founder of Circle – the crypto unicorn with a $3 billion valuation – named Jeremy Allaire, also agreed, saying that they were very active with Congress, with policymakers too.
The vice president said that people should expect to see more layoffs, company closures, as well as bankrupts in this year. He noted that crypto companies have to tighten their belts and get ready for a long winter season. Token sales are also going to be challenging to execute not only as of specific regulation but as liquidity also dried up.
The crypto industry will need a little ‘Darwin Evolution’
The crypto funds which raised hundreds of millions at the peak of a bubble suffered horrific losses during the last year and a lot of which are going to suffer in 2019. He said that this consolidation is for the future as the industry grew too fast amid the market hysteria, so the period of normalization is right here. And that is not a bad thing at all.
While there are companies which are going to shutter, the good ones are going to improve, according to Scher. A little Darwinian evolution is the only thing which the industry needs. The easy money in 2017 and early 2018 bred a lack of discipline and straight-up arrogance too, according to him.
Some companies with shaky foundations are going to get washed future in this year. However, the ones that are well-run and mission-driven are going to end up even stronger.
One such example of a high-flying company which has been forced to downsize has been the blockchain startup ConsenSys. After it doubled its workforce last year, the company also laid off as much as 605 of its staff in December 2018.
The CEO of ConsenSys, named Joseph Lubin, who is also the co-founder of Ethereum, stated that ConsenSys has to eliminate underperforming projects to cut costs after the group god too big and unwieldy.
The expected influx of institutional money
According to Scher, the media hyper surrounding the anticipated influx of institutional investors is actually not a lie. He said that this is very real – some companies such as Fidelity, Goldman Sachs, as well as ICE are publicly making big moves in the space.
Beyond the high-finance, Robinhood and Square also made aggressive inroads into cryptocurrency, and now Facebook is also said to be launching a stablecoin.
Scher commented that a sea change appears on the horizon for the crypto market, and that is the reason why the current or temporary Crypto Winter does not faze him. He claimed that one of the best parts of the watershed of crypto in 2019 is going to laugh in the faces of the gloating naysayers when they are forced to eat their words.
He promised that the change-averse corporate executives that derided crypto are going to be embarrassed when their dismissive quotes resurface down the line.