The economic slowdown will trigger traction for cryptocurrencies again in 2019, believes the co-founder of Thomas Crown Art.
Are Cryptos Dead?
Cryptocurrencies have had a terrible year so far. After reaching an all-time high of over $800 billion in market capitalization in January 2018, the cryptocurrency market has lost over $700 billion throughout the year.
Despite predictions of a rally during the October to December timeframe, the market saw a further decline of 20% in November. Many critics have already sounded the death knell for cryptocurrencies.
That might change in the coming year. Well, at least if Ian McLeod, co-founder of art-tech agency Thomas Crown Art, is to be believed. According to McLeod, cryptocurrencies will become a “safe haven” over the next 12 months. He attributed this claim to political uncertainties and increasing trade wars that are threatening to slow down the global economy.
There’s a growing list of investment tailwinds to consider for 2019. These include significant trade tensions, rising interest rates, political uncertainties, including Brexit, and complacent financial markets.
Will Cryptos Bounce Back in 2019?
Blockchain technology has slowly been making its way into many enterprises and has also gained acceptance by many governments. However, cryptocurrencies have lagged due to multiple issues including scalability, security, and a lack of regulation in most of the developed nations.
McLeod holds on to the belief that cryptocurrencies will go mainstream as enterprises begin to understand the full potential of the technology.
McLeod said cryptocurrency adoption will “dramatically gain momentum in 2019 as the world, especially businesses, realize ever-more uses for and value of crypto and blockchain.”
Events like Brexit and the ongoing trade tension between the U.S. and China are likely to increase the demand for cryptocurrencies, according to the art-tech agency co-founder.
There are several key reasons why the likes of Bitcoin and Ethereum will be safe havens. These include scarcity because there’s a limited supply; permanence, they don’t face any decay or deterioration that erode their value; and future demand certainty as mass adoption of cryptocurrencies and blockchain, the technology that underpins them, takes hold globally.
We are some way off from cryptocurrencies replacing the Swiss Franc, the Japanese Yen or gold as the preferred safe haven assets. However, as the world moves from fiat money to digital, and as the adoption of crypto picks up, there can be no doubt that cryptocurrencies will be firmly in the pantheon of safe haven assets within the next decade.
While such arguments have been presented before by the believers, the price action has not been supported by these claims. We will have to wait for a year to pass in order to validate the opinions of the bulls like McLeod.
Do you agree with the views expressed by McLeod? Let us know in the comments below.
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