(Not another) Crypto 2020 Predictions
Privacy, Fortress and Mt Gox, Coinfloor ditched Ethereum, Cindicator Capital, Hodl Hodl, Blockchain.com, SBI and Boerse Stuttgart Group
|Etienne Brunet||Dec 22, 2019|| 2|
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This is the last newsletter of the year. We will resume the first week of January.
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🕵️ (Not another) Crypto 2020 Predictions
It feels like everyone shared their predictions regarding the crypto ecosystem for next year. One of the most thoughtful is from Messari. It’s pretty long but a good read. The team at Token Daily had also a good list, have a look, it’s basically the who’s who of crypto. I guess I am not (yet) a who’s who so I thought you may enjoy my views below. Note, these are all thoughts. Don’t take it seriously.
2020 will be a year (again) focus on Bitcoin and its ecosystem including gift cards (see Paxful), passive income (see Lolli) and Mining (see Crusoe). We will be mostly disappointed by the price action since most people are expecting a new high (no idea by how much but not greater than $20,000)
Meanwhile, Derivative and option exchanges will be the main revenue drivers for most centralised exchanges and this will drive acquisitions and partnerships to win liquidity (See Paradigm and GlobeDX)
Most centralised exchanges will struggle with depreciating fee and will look to expand to other areas such as custody, staking but lending will become really their main bread and butter.
There will be at least three new crypto SF venture funds with $150m+ AuM launching in Q2 ‘20 but the most exciting companies will continue to come from Europe (see Nexus Mutual, B2C2, Copper, Lacero, Argent, GlobeDX, Guesser etc..)
The institutional investors will continue to educate themselves and be pretty active around custody. They may even partner with a few but no major splash.
France will lead in crypto regulation followed by Switzerland. Singapore will be the centre of Asia. The US election will be challenging for digital assets.
There will be more crypto scams but most of them will not be revenue generative for the hackers. Or in other terms, on-chain analysis will continue to become better at tracking on/off ramp.
Ethereum will be in production mode and no real ETH Killers will have any luck with their launch. DeFi will try to expand beyond lending and stablecoin but will fail. Telegram will launch. Maybe. Or at least the token will be liquid.
Square will integrate with a gift card provider and expand aggressively in Africa.
The most exciting new projects will come from places such as gaming (Just), decentralised privacy enabled exchange (Too much AML/KYC and Chainalysis will drive growth), bonding curve + uniswap (unisocks) and banking (No one really seem to understand how good the business of Silvergate is.)
Have a great Christmas break and thank you for following us!
🐦 Tweets of the week
See below a very good list of privacy first applications ranging from messaging to trading.
🤹 Startups News
According to reports, the New York-based private equity firm Fortress is offering Mt Gox creditor claims at $778 per coin. The offer is 13.5% lower than what Fortress offered in July and Mt Gox claimants have until December 31 to accept the offer. [Link]
Coinfloor, the U.K.’s longest-running cryptocurrency exchange, plans to delist ethereum next month, citing an unclear future of hard forks and the need for onerous technical support for the second-biggest coin by market capitalization. [Link]
The plan comes ahead of the launch of ethereum 2.0, tentatively planned for early 2020, which will begin the process of shifting the network away from the energy-consuming proof-of-work (PoW) consensus mechanism to proof-of-stake (PoS).
Coinfloor’s decision suggests that nurturing a team with the specific expertise to follow the technical trials and tribulations of coins like ethereum may be too expensive for smaller crypto players, particularly if this constitutes only a small part of their trading volume.
Chainalysis: PlusToken Is Dumping on Huobi OTCs, May Be Eating Into BTC Price. The trades happen at a handful of independent over-the-counter (OTC) desks that operate on the Huobi exchange. If Chainalysis’s findings are to be believed, the scammers have sold some 25,000 BTC for just shy of $200 million in profit — and they’ve got at least another 20,000 that’s been untouched since September 2019.
Cindicator, a tokenised fintech developing predictive analytics, launched Cindicator Capital, a digital assets quant hedge fund. The fund will use Hybrid Intelligence (collective and artificial intelligence) developed by Cindicator since 2015. [Link]
🎁 Startups Product & Partnership
Hodl Hodl has launched the first part of the exchange’s API, best known for its peer-to-peer (P2P) structure that allows it to operate without holding user funds. [Link]
“The API was developed due to the high demand from OTC [over-the-counter] brokerage desks. It will allow other services such as wallets and different types of aggregators to include Hodl Hodl in their offering. Obviously, this will increase our popularity,” Hodl Hodl CEO Max Keidun
Thomson Reuters Taps Verady for Cryptocurrency Tax Tool. TR provides different crypto-focused products including a price data feed for virtual currencies, dubbed “Cryptocurrency Real Time Rates.” It also launched a new version of its MarketPsych Indices (TRMI) to include market sentiment data for the top 100 cryptocurrencies. [Link]
Blockchain.com is adding a British pound (GBP) gateway to its cryptocurrency exchange, The PIT, as it prepares for Britain’s coming separation from the European Union, or Brexit [Link]
The Crypto Banking Apocalypse: Will Crypto Businesses have banking once the next financial crisis hits? This article will aim to highlight the inherent issues in the current banking climate as they relate to Crypto Businesses [Link] + [Video]
Fidelity opens a Bitcoin OTC trading business in London. [Link]
🏦Regulations / Universities
On December 17, the European Central Bank (ECB) published a report that showcased its blockchain technology proof-of-concept. One particular feature the central bank digital chain holds is the ability to issue “anonymity vouchers.” [Link]
Reginald Fowler, one of the co-founders of Crypto Capital, is expected to change his plea in front of the court to “guilty” for the charges brought against him. [Link]
French regulator grants its first approval for an initial coin offering [Link]
"The PACTE law has indeed introduced in France an optional visa regime for fundraising in crypto-assets. Only public offerings of so-called utility tokens, which are not considered as financial instruments, are eligible for this optional visa."
💰Fundings & M&A
Japanese financial giant SBI Holdings announced its plans to invest in two digital asset-focused subsidiaries of Boerse Stuttgart Group – Boerse Stuttgart Digital Exchange GmbH and Boerse Stuttgart Digital Ventures GmbH. [Link]
About the author: Etienne used to head principal strategic investment (Companies, Funds and token investment) at Elwood, One of the largest European digital assets investment firm spun off of Brevan Howard, billion-dollar Macro Hedge fund. Previously, he was part of the founding team at the largest Capital Markets Venture Fund in London, Illuminate Financial.