Current State of The Crypto Market (December 23rd, 2019)

Hackers:  Following the theft of $6.5 million worth of VET tokens from its buyback wallet, blockchain platform VeChain announced that it will be taking several measures to ensure the network’s safety. The CFO took full responsibility for the attack and resigned from his position, while the company said the final decision as to what to do with the stolen funds will be left to the community.  VeChain, an enterprise-focused blockchain ecosystem, has announced that it will be implementing measures that will make the network more secure and resistant to hacks. The announcement, published on Medium on Dec. 22, was made in the aftermath of the biggest theft the network has seen.  Just over a week ago, unidentified hackers stole 1.1 billion VET tokens, worth around $6.5 million at press time, from the company’s buyback wallets. At the time, the Singapore-based company said the hack was most likely a result of a human error and that it was working on improving the protocols that enabled such an error to occur.

Key Players:  Benjamin Cowen, who has dedicated previous analysis to the Bitcoin (BTC) potential future price, now looks at the wider market caps of all digital assets. This time, the data for all altcoins and tokens, including BTC, is based on weekly data and is less complete.  Cowen has tried to build a trend and a set of correlations based on the movement of the crypto market so far. The altcoin lot has shown some stunning ratios of peak prices, and it is difficult to estimate the next peak. Potentially extending previous crypto peaks, altcoins may rally as much as 39 times, based on past performance, though this is the most extremely optimistic scenario.  In that scenario, the entire value of the crypto market may reach 32 trillion by 2023 – with Cowen warning this is a far-fetched overestimation.

Banks & Institutions:  The finance industry as a whole has been hesitant to embrace or adopt crypto in any forms, with many major figures within the industry claiming that Bitcoin and other digital assets are simply speculation tools that investors use to try to turn quick profits, rather than revolutionary technologies that could help usher in a new era of digital finance.  In a recent blog post on Ripple’s website titled “2020: The Year of the Digital Asset,” the fintech company notes that they believe adoption of cryptocurrencies in the new year will be primarily focused on increasing the ease of usability for digital assets via wallets.  Ripple’s Senior Vice President of Product, Asheesh Birla, predicts that mobile wallets and payment apps like PayPal will adopt blockchain and cryptocurrency in an attempt to better compete with digital banks.  One of the boldest predictions within this blog post came from the company’s CEO, Brad Garlinghouse, who notes that he anticipates half of the top 20 banks in the world to actively hold and trade digital assets in 2020.

Adoption: With the adoption of cryptocurrencies moving on from retail to institutions and then to sovereign, the bar for the most unlikely forces embracing digital currencies has been raised. Changpeng Zhao, the CEO of Binance is of the opinion that 2020 will see more governments moving into both the cryptocurrency and blockchain world.  In the latest ‘Community Predictions for 2020,’ by Global Coin Research, CZ was asked his “adoption expectations,” and he pointed right to the man at the top. Not Satoshi Nakamoto, but the government. He stated,  “There is a growing amount of governments across the globe examining blockchain and cryptocurrencies, including stablecoins, as well as self-regulated and global regulatory standards, which indicate more widespread public adoption.”  Several governments have increasingly come to terms with the idea of digital currencies, albeit from a stablecoins perspective. In July, China revealed to the world that a digital yuan has been in the works for over the year, and began accelerating its development with other private-stablecoin competitors facing regulatory scrutiny.  On the other side of the globe, the idea of the digital Euro was mulled over by the new president of the European Central Bank. Recently, the ECB released a report analyzing the importance of anonymity and private transactions should such a central bank digital currency be implemented. Other countries have also suggested tying their fiat to a digital currency allowing use both at the wholesale and retail level.