2019 was a volatile year for Cryptocurrencies as the market bled throughout the year. Apart from the trading sector, the industry saw many developments that further boosted the popularity and use of blockchain technology alongside cryptocurrencies.
2019 – The year of growth
According to the yearly report from the cryptocurrency data platform CoinGecko, the entire market capitalization and trading volume have been steadily on the rise. The total market cap of the industry has gone up 44.1% gaining $60 billion over the year, closing the year at $180 billion.
The United States Market is a key player within the crypto economy, but 2019 hasn’t been quite favorable for the crypto market in America. Throughout the year, major exchanges withdrew their services for US-based customers. Binance, Huobi, OKEx, and Poloniex all stopped providing their services from US customers at some point in 2019 due to the harsh regulatory landscape.
However, these exchanges are trying other ways of staying relevant in the US market. For example, Binance launched a partner exchange called Binance.US which tailors its offering to be in compliance with US regulations.
Despite all the setbacks, the crypto market recovered quickly as the report reveals that the trading volume for the entire market was up close to 600% with an average of $50 billion in daily trading volume.
Institutional involvement on the rise
Besides this, 2019 sparked institutional interest as reputable names in the world of traditional finance and trading started offering institutional-grade products for trading and storing cryptocurrency. The spotlight was on Bakkt, which was launched by New York Stock Exchange operator ICE.
The growth of traditional forms of trading entering the Bitcoin space has often been associated with a maturing market. The Bakkt BTC futures contracts that started off slow had soon picked up the pace with 1741 BTC ($15.5 million) worth of contracts traded in one day in November. This followed another record in December as the ICE-backed crypto exchange managed to trade close to $50 mln worth of its physically-settled Bitcoin futures on Dec. 18.
CME’s growth in the institutional segment was also showcased in the latest Arcane Research report that noted that the platform doubled its trading volume within the first week of launch.
These new trading instruments have played a great part in the overall growth of the crypto industry and have started drawing in institutional investments, which is vital for any market to prosper.
The CoinGecko report also described the impact that Decentralized Finance (DeFi) had on the market. According to the report, DeFi plays an important role in banking the unbanked and making the money market more efficient, the report highlights the $160 million growth in the sector and the prevalence of lending platforms like Maker.
The DeFi space includes stablecoins, derivatives, decentralized exchanges, and lending services. Maker shines as it is the dominant leader as it’s responsible for nearly 51% of the value locked within the lending sector. For the most part, all of the sectors under the DeFi umbrella have experienced immense growth.
The performers of 2019
Among all the crypto-assets, Bitcoin was the best performer of 2019, gaining 95% over the year with volatility ranging from $3,500 to $13,500. It surpassed Gold that rose 19%, the S&P 500 29% and silver 15.6%. On the 1st of January 2019, Bitcoin was trading at $3776 and it closed above $7200 on December 31st. Bitcoin dominance has also been very high this year against altcoins.
Among the top altcoins, XRP dropped the hardest with a 45% decline price. Ethereum, on the other hand, took a small hit with a 2% drop in value. Bitcoin Cash (BCH) and Litecoin (LTC) gained 38% and 37% respectively.
Other than all the above factors, 2019 was also the year of the hackers, with multiple attacks on exchanges throughout the year.
Overall, the cryptocurrency market continued to mature in 2019 with the introduction of new trading instruments, institutional-grade infrastructure, and regulations. However, Bitcoin’s performance will still likely continue to be the main driver of the cryptocurrency market and the Bitcoin halving is likely going to be the leading narrative for 2020.