In 2018 we witnessed an uneasy decline in the crypto market which can be attributed to a few factors: the SEC crackdown on ICOs, investors losing money to false projects and lack of transparency and uncertainty in the blockchain world. To make matters even more dubious, it seemed that most were more interested in the “get rich quick” scheme, instead of learning what solutions this new “crypto” technology paradigm is capable of providing.
However, the year wasn’t a complete loss, the audience became generally more knowledgeable on possible use cases of the bitcoin itself and also became more cautious on speculative investment chances. Importantly, as the gavel smacked down on illegitimate ICOs, the market turned its head towards more regulated options, thus security tokens offerings (STOs) a.k.a “Digital Securities” were introduced.
Digital Securities are legitimate and regulated with intrinsic value attached. They are designed to mimic already existing investment instruments, but in a digital format. Hence, they must abide by SEC guidelines, filing protocols and reporting requirements.
As we welcome 2019, we reflect on the previous year of shortcomings and stabilizations in order to better predict what is in store for the crypto market and distributed ledger technology this year. It’s undeniably challenging to clearly foresee the future, but in the zeitgeist of today’s world it shows no signs of slowing down.
In order for responsible growth of mass adoption to occur, comprehensive and explicit guidelines are absolutely necessary to be brought forward by regulators. Blockchain technology has incredibly potent implications for consortium, transferability and legitimacy; however, as mentioned above, the caveat to achieve these outcomes relies on a smarter approach to compliance and regulatory collaboration.
The crypto market would not be where it is today without the events leading up to it. We are all learning and contributing to the development of blockchain’s evolution one step at time. Given the market’s current standstill position and traditional companies yearning desire to incorporate new capital raising strategies, one thing is certain: security tokens are here to stay and they are picking up speed in 2019. We expect markets such as real estate, fine art, car collectibles, franchises and more to benefit from Digital Securities. STOs will absorb traditional markets and become increasingly popular as the benefits are realized and the space becomes established, trusted and compliant. Keep your eyes on 2019 being the year where new value gets created in pre-existing channels that you never would have expected to lead the adoption curve into a new financial system.