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Luno’s crypto predictions for 2020

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Marius Reitz, Luno’s GM for Africa.
Marius Reitz, Luno’s GM for Africa.

Local crypto-currency exchange, Luno, expects to see greater adoption of Bitcoin and altcoins in 2020, continuing the momentum gained in 2019.

Despite the pitfalls of investing in crypto-currencies, Luno says the alternative asset class is slowly becoming more mainstream, with increasing numbers of people across the globe investing in it.

“We started 2019 with Bitcoin at US$3 843 with a daily volume of US$4.3 billion and in December 2019, the price was around US$7 200 with a volume of US$17 billion, having peaked at US$13 016.23 on 25 June with US$45 billion of BTC being traded,” notes Luno.

Marius Reitz, Luno GM for Africa, makes some predictions for 2020:

1. Regulation

With the crypto space maturing rapidly, regulators around the world are accelerating efforts to either embrace or regulate crypto-currencies. The pace escalated in 2019, no doubt motivated by Facebook entering the space with its Libra project.

In 2020, we expect this to continue. The South African Reserve Bank is expected to announce crypto regulation in the first quarter of 2020. Internationally, we will also see a number of planned guidelines come into effect. In October, the G7 group of nations outlined the need for stablecoin regulation and implied that guidelines may be produced in 2020, while Japan also passed a bill which comes into effect in April to reinforce its existing crypto-currency laws.

Another major regulatory development expected this year is the introduction of the 5th Anti-Money Laundering Directive (5AMLD).

2. Adoption

One of the criticisms of Bitcoin and other crypto-currencies is the lack of opportunity to actually use them. Throughout 2019, we saw this change rapidly, with new start-ups such as Flexa introducing slick crypto-payments platforms for retailers. More importantly, there was a diverse array of retailers both big and small, willing to integrate their services.

In 2020, we expect this trend to continue. Starbucks, which owns almost 30 000 outlets globally, has announced it will be integrating Bakkt’s crypto-payment service in the first half of 2020. Perhaps a major player integrating Bitcoin will motivate other retailers to accept crypto payments.

We anticipate that more institutional investors – banks, hedge funds, pension funds and endowments – will buy into cryptocurrencies as they diversify their portfolios, now that they finally have the professional machinery to do so.

3. Major events

There are several major events anticipated in 2020 which allow crypto-currencies to transition into a new role in global financial services. The flagship project for this change has been the Libra project, which drew criticism from all sides as regulators lined up to grill Facebook CEO Mark Zuckerburg and Libra CEO David Marcus.

Despite the bashing, they have persevered. In October, 21 organisations officially signed the Libra Association charter at the project’s inaugural meeting in Geneva, with Andreessen Horowitz, Vodafone and Uber among the big names.

Libra nodes which process transactions are now being run by Coinbase, Uber, BisonTrails, Iliad, Xapo, Anchorage and Facebook’s Calibra.

This puts it on track to deploy its mainnet (technical foundation) in 2020 as planned – regulatory concerns permitting.

4. Crypto in Asia

In addition to these trends, we will be following the development of crypto in Asia. We have seen Malaysia welcome crypto companies back into the region (including Luno), while South Korea and Thailand have also started to implement new regulations that should pave the way for the advancement of crypto. There are rumours that China could make a big move in the space with the introduction of its own digital currency.

India, another country initially opposed to crypto, also appears to be changing its position. In November, Sanjay Dhotre, India’s minister of state for electronics and information technology, claimed that a “national level blockchain framework is being prepared” considering the technology’s potential and different use cases.

5. New digital currencies

Finally, we will see the launch of the long-awaited Ethereum 2.0, codenamed Berlin. We also could see the death of ICOs.

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