VanEck to Nasdaq: Bitcoin Market Structure Expected to Improve in 2019

Bitcoin and the rest of the cryptocurrency market will grow slowly and steadily in 2019, Gabor Gurbacs told Nasdaq.

The chief digital asset strategist at VanEck, a New York-based investment giant, said that investors would be more comfortable while investing in digital assets. Development in custody and surveillance programs, he added, would bring due diligence to the cryptocurrency industry. At the same time, crypto 2.0 products like futures and exchange-traded funds would ensure simple entry points for retail and institutional investors to access the crypto markets.

#Cryptocurrency is looking at slow & steady progress in 2019:
◻ Improved robustness of #crypto markets
◻ Advances in surveillance
◻ Developments in #crypto 2.0 products
– @vaneck_us @MVISIndices @gaborgurbacs & @JillMalandrino on #TradeTalks: https://t.co/1mS0XFr7Od

— Nasdaq Exchange (@NasdaqExchange) January 16, 2019

“Investors do not accept cut-corners in the digital asset market structure. They expect a lot of custodians to come to the market,” explained Gurbac. “They expect their assets to be safe which means non-nefarious activities should be toned down by an increase in surveillance. And frankly, most of the investors want to invest in assets conveniently – with the systems they already understand.”

Setting Up a New Bitcoin Market

Gurbacs’ statements come at a time when the cryptocurrency market is struggling to recover from its 2018’s crash. Bitcoin mainly failed to initiate a robust bullish correction after losing as much as 85% of its value since its all-time high. At $3,500, not many investors looked to enter the bitcoin market as they expected an extended sell-off action towards $1,500.

“Bitcoin continues to struggle and is in the mid-$3k’s. If prices were oversold, we would have bounced by now. This lethargic base tells us that demand is still incredibly weak and this selloff still hasn’t found a bottom,” Jani Ziedens of the Cracked Market blog said.

Nevertheless, the positive speculation attached with the launch of Bakkt, an ICE-backed bitcoin futures platform, this January kept bears from crashing the bitcoin market anywhere below $3,100. VanEck’s own Bitcoin ETF application awaits approval from the Securities and Exchange Commission (SEC) by February which, according to Gurbacs’ earlier statement, could bring at least a billion dollar worth of investment in the Bitcoin space.

At the same time, Boston-based Fidelity, the world’s fifth largest asset management firm, already offers enterprise-level custody solutions for cryptocurrency investors. ItBit, Coinbase, and the Winklevoss-owned Gemini are providing the custodian services to wealthy investors. Banks like Northern Trust, Goldman Sachs, and JP Morgan are also developing their safe deposit box for cryptos.

The First Crypto IPO

Two thousand nineteen could also be the year whereby established institutions would merge with or acquire young crypto companies, said Gurbac.

In 2018, a mostly unregulated ICO space helped startups raise billions of dollars in investments. Most of these companies failed to deliver any working product, thereby leading to a so-called “crypto bubble burst.” With regulators keen on putting restrictions on these startups, the only way left for them to raise funds is via accredited investors.

Gurbac believes that the crypto startup space could grow more organically: by seeking mainstream capital.

“The goal they are going after is going to be easier to achieve,” said the VanEck official about crypto companies. “So they will find some ways to merge or raise capital together with mainstream financiers. The acquisition front [meanwhile] will see some financial services companies and large tech firms to acquire digital assets of crypto companies to increase their offerings.”

Overall, the IPO channel would be wide, added Gurbacs, which will see the launch of the first crypto public offering in 2019.