The state if the cryptocurrency market in 2019 is certainly different from how it was in the last two years, and in a way, it has been shaped by the highs and lows of 2017 and 2018 respectively. Not many people in the crypto sector will forget how bitcoin reached an all-time high of nearly $20,000 in December 2017 only to plunge into one of the longest bear streaks in 2018.

These two events, while they are on the extreme sides of the spectrum, played a vital role in stabilizing the industry. At the same, new players entered the market while some left after being burned. These actions were preparing the industry on what was yet to come.  2019 is proving to be a transitional year.

Cryptocurrency prices and stability

By many standards, the cryptocurrency industry is measured by the price of bitcoin and its fluctuations. After spending the better part of 2018 on a downward trend – with self-proclaimed analysts doubling down on their outrageous predictions – bitcoin started the year trading below $4,000.

This was a far cry from its all-time-high but it fought back throughout the year. On June 26, bitcoin reached its highest price in nearly 17 months. The conversation on the bear market is nearly forgotten as people eye another ride in surpassing the all-time-high. It doesn’t look probable at the time, but with bitcoin, no one really knows.

According to TradingView, bitcoin is 115 percent in the green in year-to-date (YTD) performance.

Bitcoin is up 115 percent in Year-to-Date performance. //Source: TradingView

The same cannot be said for altcoins as they are collectively having one of their worst years. Their prices may be doing well against the USD but they are no match for bitcoin. This is even truer as the leading digital asset has managed to increase its dominance to nearly two-thirds of the total market cap.

The entire market cap of the altcoin market has only grown from $60 billion since the first day of the year to its current value of $74.9 billion, CoinMarketCap data shows.

Altcoin market cap 2019. //Source: CoinMarketCap.com

While this was music to the ears of bitcoin maximalists, gold bug and crypto critic Peter Schiff fired warning shots against bitcoin’s rising dominance. He argued, in a tweet, that the collapse of the altcoin market would be followed by bitcoin’s demise.

Facebook’s Libra cryptocurrency

Major companies have for the last decade, cautiously watched as the cryptocurrency revolution unfolded before their eyes.

In June this year, Facebook, the biggest social media network with nearly 2.7 registered users worldwide, publicized its intention to dabble into the cryptocurrency market with a project codenamed Libra.

Up until that time, Facebook had kept its cards close to its chest after announcing in December last year of its plans to release a stablecoin for the Indian market.

Libra, planned to launch in May next year, is a permissioned cryptocurrency set to be governed by the Swiss-based non-profit Libra Association. The founding members of the association include some of the biggest names across several industries.

Libra Association founding members. //Source: Libra white paper

But Facebook’s ambitions were met with hostile governments and regulators who believed that the social media giant’s plans would destabilize the existing financial system. US President Donald Trump took to Twitter to proclaim that he is not a fan of Bitcoin and Libra. He went as far as saying that Facebook should acquire the required licenses if it wants to get into banking.

The pressure got too much and seven of Libra Association’s founding members – Stripe, Visa, Mastercard, eBay, Booking Holdings, PayPal, and Mercado Pago – have quit the project. Whether Facebook’ Libra will see the light of day remains a hotly contested debate.

However, Libra chief David Marcus claims that Facebook will take a different approach rather than give up altogether.

Crypto regulation and the innovation arms race

Facebook’s cryptocurrency project threatened governments so much that they came out of their shell to speak out against Libra and cryptocurrencies in general. While the majority of lawmakers made it clear that Facebook needs to be scrutinized before it can be greenlighted for development, some countries are developing digital currencies of their own.

The People’s Bank of China (PBoC) announced plans to accelerate the development of its national currency, a project that has been moving at a snail’s pace over the last five years or so.

Portugal became a darling of the crypto community after ruling that the buying and selling of cryptocurrencies such as bitcoin are tax-free. This comes at a time when the United States taxmen, the Internal Revenue Services (IRS), is cracking down on cryptocurrencies.

Asia continues to be a major hub for the cryptocurrency market. The cryptocurrency market in Singapore is swimming in waters of caution.

India’s tough stance on cryptocurrencies took a turn for the worst when the country proposed a complete ban on any activity related to cryptocurrencies (buying, selling, trading, etc.). The country is even thinking of sending offenders to jail for up to 10 years. The proposed legislation has been met with an outcry from within and outside the country but the government remains adamant.

A report published by the Washington-based policy institute The Foundation for Defense Democracies (FDD) highlighted that America’s adversaries – China, Russia, Venezuela, and Iran – are turning to cryptocurrencies to dilute US financial dominance thanks to the use of the dollar as the world’s reserve currency.

North Korea added its name to the list after announcing that it was in the early days of building its own cryptocurrency.

The Financial Action Task Force (FATF) flexed its muscle in the crypto industry after enacting new rules aimed at criminalizing the so-called privacy coins. The South Korean branch of OKEX exchange delisted the privacy coins Monero, Dash, Zcash, Horizen, and Super Bitcoin while Upbit removed Monero, Dash, Zcash, Bittube, PIVX, and Haven from its trading pairs in accordance with FATF’s new guidelines.

Block.one, the company behind EOS.io, an Ethereum competitor that raised more than $4 billion in its recording-breaking ICO, paid a fine of $24 million to the United States Securities and Exchanges Commission (SEC) for failing to register its successful initial coin offering as securities offering.

Perhaps the most anticipated event of the year was the fate of Intercontinental Exchange-owned company, Bakkt. The company was greenlighted by the New York State Department of Financial Services to offer custody services for physically delivered bitcoin futures.

Crypto is still a crime magnet

It will take a while before criminal activities are eliminated from the crypto space. And this year is no exception. Crypto intelligence firm CipherTrace estimates that the crypto community – investors, exchanges, and users – have lost approximately $4.3 billion through illegal activities ranging from hacks to exit scams.

Binance, one of the leading cryptocurrency exchanges, lost 7,000 bitcoins through a hack, prompting the exchange’s CEO Changpeng Zhao to call for Bitcoin blockchain re-organization. The suggestion was not well received by the community and after cooling down, Zhao apologized for the statement.

CipherTrace also labeled 2019 to be “The Year of Exit Scams” after investors lost nearly $2.9 billion in a suspected exit scam perpetrated by South Korean exchange Plus Token. This came at the back of $195 million lost in the QuadrigaCX scandal at the start of the year.

Final thoughts

By some measures, 2019 has been a positive year for crypto. One of America’s leading banks, JP Morgan, launched its own in-house stablecoin in February although its CEO Jamie Dimon has a history of bashing bitcoin.

Tron founder and CEO Justin Sun paid $4.6 million to have a charity lunch with legendary investor and bitcoin critic Warren Buffett, but it never happened.