Earlier this year, the total value of all crypto assets reached an all-time high of over $800 billion, driven by a flood of retail customers looking to capture opportunities in a new market. Crypto asset market structure is extremely fragmented; there are more than 200 unique exchanges and platforms, each offering their own set of products. Exchanges also operate out of different jurisdictions, which yield different rules, requirements and operational standards and guidelines.
What’s next? While these drawbacks may sound daunting, the pressure on these systems has prompted the industry to arise and to begin developing solutions at a much faster rate than if we hadn’t experienced the rush of market activity late last year. There has been a lot of work underway in 2018 to encourage regulatory clarity, streamline operations and continue building out the space.
On the regulatory front, we saw the introduction of new industry associations and SROs focused on protecting market participants, providing clear rules and standards and encouraging professionalism in the space, including the Blockchain Association, the Association for Digital Assets Management (ADAM) and the Virtual Commodity Association. The collaboration between these parties, organizations like the Chamber of Digital Commerce and government officials should pave the way for key developments in the year ahead.
So much of the attention today is focused on price, but there is strength in the work done this year to create real, tangible advancements. If you look at where the industry was two years ago today, before the dramatic run up on price, before the underdeveloped infrastructure issues were identified and before so many eyes were watching the space – we have come a long way, very quickly.
While there is still a lot of work ahead, there remains a strong base for optimism. We expect that 2019 will look a lot like 2018, with more people diligently working behind the scenes, refining their strategies and preparing for the next wave of growth. At Cumberland, we are committed to helping the ecosystem grow and evolve in a responsible and sustainable way. This year moved the industry closer to that future – and we were proud to be part of it.