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Cryptocurrencies Annual Market Recap – 2019

It was a bullish year for the cryptos. How the likes of Facebook navigate regulatory issues could materially change the landscape, however…
Bob Mason
Crypto00 567

2019 delivered some much-needed respite to the crypto bulls who got burned in 2018’s crypto meltdown that had seen Bitcoin visit $3,200 levels. It was quite a fall from the all-time high $19,981 struck back in December 2017.

The gains through 2019 may not have been as spectacular as those seen back in 2017, but they were with meaning nonetheless.

For the crypto market, Bitcoin’s recovery from 2018’s lows over the course of 2019 ultimately delivered one simple statement. “Cryptocurrencies are here to stay.”

There was certainly much less regulatory chatter throughout 2019 when compared to 2018, which provided support to Bitcoin and the broader market.

Throughout the year, there were also some key events that contributed and also limited the moves over in 2019. Key events included:

The SEC and Bitcoin ETFs

The SEC rejected Bitwise’s Bitcoin ETF application back in October. While the rejection was negative, the SEC Commission did attempt to soften the blow.

In a statement, the Commission stated that the rejection was not based on an evaluation of whether Bitcoin or blockchain tech has utility or value as an innovation or an investment.

For those looking for sizeable inflows of institutional money, this was a disappointment. The Bitwise ETF, however, may not have garnered the level of interest that some had anticipated.

Other applications were withdrawn as the SEC dragged its feet in the early part of the year.

Other Bitcoin ETF applications are currently under review, with the SEC scheduled to rule on the Wilson Phoenix Bitcoin ETF proposal by February.

Halving Events

Litecoin’s halving event also garnered plenty of attention. On 5th August 2019, Litecoin went through its 2nd halving event, which occurs every 4-years. Rewards for producing a block on Litecoin’s blockchain reduced from 25 to 12.5.

While insignificant for the broader market, a Litecoin rally in the lead into the halving event was an impressive one. Litecoin struck a June high $146 before hitting reverse. Year-to-date, Litecoin had gained 390% to June’s 2019 high…

The reversal was as dramatic, however, with Litecoin sliding back to sub-$40 levels. In spite of the sell-off, however, Litecoin did manage to close out the year with a 38% gain.

China’s Blockchain and Crypto Love-Hate Relationship

China’s Ministry of Industry released its top-ranked blockchain projects in October. The released came off the back of China Premier Xi’s supportive comments on Blockchain tech.

EOS (1), Tron (2), Ethereum (3), Nuls (4), BitShares (5), STEEM (6), Lisk (7), QTUM (8), NEO (9), Stellar’s Lumen (10) made it into the top 10. Bitcoin came in at number 11, which is not too surprising when considering the limitations in terms of speed of transactions.

The Chinese government failed to even mention Litecoin and Ripple’s XRP, however. This may well have contributed to their woes in the second half of 2019…

Social Media and Regulator Ire

Facebook Inc. announced plans to roll out its very own cryptocurrency called LIBRA. Following the social media platform’s troubles from 2018, the announcement did not go as well as Mark Zuckerberg would have liked. One hazards a guess that the U.S government’s reaction would have been similar even if the events of 2018 had not unfolded. LIBRA would allow payments across it’s what’s App and Facebook Messenger platforms as well as its standalone platform. A certain regulatory nightmare for the U.S and just about everywhere else…

Telegram also faced the ire of the SEC as it looked to plow ahead with its plans to roll out its very own cryptocurrency, Gram. Another platform supporting the transfer of cryptocurrencies across the Telegram messaging service, the SEC stated that Telegram was in violation of the Securities Act. Telegram’s token presale had raised a whopping $1.7bn.

Central Banks

Interestingly, Facebook’s announcement of plans to launch LIBRA spurred the Chinese government into action. The threat of social media platforms reportedly drove China’s central bank to speed up the development of, what could become, the world’s first government-backed digital currency. Work began a number of years ago. It is unclear, however, whether the PBoC is close to delivering its Digital Currency Electronic Payment platform…

The ICO Market

The ICO market figures for 2019 continued to reflect the effects of governments and regulators.

Because of the increased regulatory oversight into initial coin offerings, the 2018 reversal in ICO activity continued through 2019.

According to ICOData:

  • There were 28 ICOs in 2019, which raised $371.21m that included active ICOs going into 2020.
  • The top 4 ICOs of 2019 raised $144m. This accounted for 44% of the $331m raised by ICOs that concluded in 2019.
  • In December 2019, funds raised had stood at just $4.5m. That’s a far cry from the $75.53m in 2018 and December’s $1,661.8m in 2017.
  • Total funds raised in 2018 had stood at $7,812m. (2017: $6,227m)
  • The total number of ICOs reached 1,253 in 2018. (2017: 875)

The lack of ICO activity continued to pin the likes of Ethereum back from all-time highs. Ethereum had reached $1,420 back in the ICO heydays. An all-time January 2018 high had coincided with a fruitful December 2017 and January 2018 in the ICO markets. In December 2017, ICOs had raised $1,661.8m and $1,522m in January 2018…

The Crypto Top 10 Movers and Shakers

While there was not much in favor of the broader crypto market through 2019, it was a bullish year compared to the meltdown of 2018.

Binance Coin, Bitcoin Cash SV, and Stellar’s Lumen led the way, with gains of 160%, 148%, and 109% respectively.

Bitcoin (88%) also saw solid gains, with Bitcoin Cash ABC and Litecoin both rising by 38% in the year. The upside across the crypto market was not widespread when looking at the top 10 by market cap, however.

Cardano’s ADA (22%), Ripple’s XRP (-47%), and Tron’s TRX (-31%) saw heavy losses.

For Ethereum, a 1.6% loss for the year was a minor one when considering the state of the ICO market. EOS also saw red, falling by a more modest 1.39% in the year.

When looking at the crypto market cap over the year, the bull run through to late June saw the total crypto market cap hit a 2019 year high $364.44bn.

The reversal through the 2nd half of the year, however, left the total crypto market cap back down at a year-end $193.24bn.

There was more interest from investors over the year, with 24-hour volumes jumping from as low as $13bn to as high as $117bn.

In spite of the 2nd half pullback, investor confidence returned to a certain extent, reflected in the volumes.

Volatility does remain, however. Investors will need to remain vigilant…

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