2018 Fintech & Crypto predictions

Happy new year everyone! Let’s use this time of the year to share some Fintech predictions.

1/ Governments are not going to give up to cryptocurrencies without a fight.

Some countries will issue crypto regulations and impose licenses.

China is going to authorize cryptocurrency trading again, however with strict rules. These rules will prevent some exchanges to open again and prevent most of alternative coins to be traded.

Some countries will launch their own national crypto coin. I thought Estonia would be the first country to do it, but it seems Venezuela is about to launch its “Petro” coin.

Overall, governments will win tactical battles (have crypto exchanges’ bank accounts closed, etc.), but won’t destroy the crypto market because of its resilient nature. And after all, it is a source of tax revenues.

2/ While remaining highly volatile throughout the year, the cryptocurrency market will reach $1.5T valuation.

If you try to assess cryptocurrencies prices considering them as a payment system you are missing the point. For now they are used as store of value and speculative investment. Think stocks or gold, with more risks and rewards obviously. The current crypto market at $0.7T is over valued in the short term, but under valued in the long term. For comparison, Blackrock has ~$6T AuM, World’s gold reserves are worth ~$8T and European stock markets are valued at ~$8T.

Out of the top 100 cryptocurrencies by valuation today, 50 will remain in the top 100 in one year.

Bitcoin will continue to lose its dominance down to 20% (I don’t see lightning as a game changer). It will remain a leader in the field. The only other serious contender for the first place is Ethereum.

Bitcoin will be forked again because money (same as what happened with bcash).

Some cryptocurrencies valuations will continue to soar by hundreds of %, because more coins, more institutional money and more gamblers pump & dumpers individuals are going to enter the market.

At the same time, the cryptocurrency bubble will explode for some tokens that are over-valued and deliver nothing of substance.

However, if not one single use-case manages to deliver an actual service or product in the real world, the crypto market might significantly drop at the end of 2018.

3/ Several business implementations of blockchain will go live (ASX, BNP Paribas SmartAngels, CME Royal Mint Gold trading, etc.). If by “blockchain” you mean the introduction of encryption/hashes and data replication into existing businesses processes (i.e. incremental innovation, not the expected revolution).

4/ Voice tech will be trending – even though adoption will remain limited. Think contactless payments: what is the adoption rate after ~10 years?

5/ CyberSecurity: one of the world’s top 50 banks will suffer from a significant breach

6/ “Evangelists” will try to hype quantum computing but will fail to convince me. It is too early to expect anything significant in 2018.

Do you agree with these predictions?

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