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Is the road blocked and chained? EAK Digital explores the potential road bumps ahead for the rest of 2018 and moving into early 2019, and what that means for you and your blockchain project.
What is there to worry about?
At the time of writing, the last golden rays of what has been a truly fantastic summer are easing us into what could be a stormier and more uncertain autumn and winter. We are only few weeks away from entering the final quarter of 2018. What follows will aim to adumbrate some of the issues which may rock your blockchain boat in the final quarter of 2018, and propose some possible remedies and courses of action to mitigate some of the adverse effects of the stormy seas which potentially lie directly ahead.
The year has been full of contradictions and what we have seen, up until now at least, is a steady contracting of the whole cryptocurrency market. From the fantastical highs of late December 2017 – January 2018, there has been a protracted down trend, which has, understandably, made a lot of people question the future of the space.
After the exuberance, what is needed (for the long-term health of the space) is a prolonged period focusing on building, developing and fulfilling certain milestones which may have taken a back seat in height of the parabolic advance. The down trend which we have witnessed in 2018 will be – in the long run – important for the development and construction of a more solid ecosystem. Although the pain might be very real, we need to remain aware that it is likely not entirely over, and we remain some distance from being ‘out of the woods’.
Indeed, on the horizon there are a few issues which still may engender some uncertainty. As we enter the final quarter of what has been, for all intents and purposes, a cooling-off year, EAK Digital wants to highlight some of the issues which we feel can cause uncertainty.
To regulate or not to regulate? That is the question…
The first of these potential road bumps are the G20 Regulations. These are set to come out towards the end of Q4 and are said to be preliminary guidelines on the regulation of certain aspects of the blockchain space. At the time of writing, it remains unclear about how this will actually affect the whole space in general.
Nonetheless, if the regulations seem to be too harsh we will most likely see a further squeeze. On the other hand, from a more reasonable and rational perspective, we must look at the regulations as the next step in blockchain’s journey into the mainstream. The regulation of the space and the technology is inevitable and, in our opinion, should be welcomed. It is only when regulations come into force and are widely adhered to that the public will be afforded any protection for their investments.
So what are we to expect with the looming regulations? Well… if there was any real chance of concretely knowing, then the work of the G20’s finest economists and lawyers would hardly be necessary. However, there are a few things that will probably be part of the preliminary guidelines:
- ICOs. There will most likely be some formal definition and agreement on what an ICO is and how best to halt nefarious actors scamming members of the public. It is unclear exactly what sort of agreement this will take, however we can be pretty certain that ICOs are in the cross-hairs of the regulators.
- Exchanges. Currently, there is no overarching supra-national body that can regulate exchanges. Although we don’t see this piece of legislation coming anytime soon, the exchanges are another piece of the ecosystem which will no doubt be targeted.
- KYC & AML. Up to this point, we have not had any comprehensive Know Your Customer (KYC) and Anti-Money Laundering (AML) guidelines which have been implemented on an industry-wide scale. There are some notable exceptions to this, such as the larger exchanges, which include their own level of KYC and AML to assuage the concerns of the authorities. Importantly, however, we are yet to see the implementation of these on a wider scale. Although the guidelines issued in October are probably going to be ‘suggestions’ for national bodies to work from, it is assumed that KYC and AML will be one of the first areas for regulation and standardisation.
The moves which the G20 make are being keenly watched across the whole of the blockchain community, and this has seen certain members and key stakeholders in the blockchain space start to self-regulate.
The long saga of the Bitcoin ETF
Now, the news on the street is that the proposed and expected Exchange Traded Fund (ETF) based on Bitcoin has been rejected again. Although there are also reports of a review of this decision, the turbulence is still predicted to be ahead. Indeed, according to certain media outlets, the Securities and Exchange Commission (SEC) rejected a further seven more proposals for a Bitcoin-based ETF. What does this mean? Well, for starters, it might be wise to understand what an ETF actually is.
An Exchange Traded Fund (or ETF for short) is – as its name suggests – an investment fund which is traded on stock-exchanges in a similar way to stocks. An ETF can hold various assets, to which Bitcoin may soon also be added. However, there has been discussion and some loud whispers for some time that this was going to potentially occur towards the end of 2018. Some argue that these rumours led to the anticipation for the rapid bounce over $5k when we reached the low earlier this year. Yet, these most recent rejections of the proposals have led to speculation that the ETFs are indeed further off than many people have thought and the SEC has kicked the can down the road to be dealt with at a time of their choosing.
Why does this matter?
There are many reasons why this could negatively impact the price of Bitcoin, and given how it remains the dominant asset in the blockchain space, Bitcoin’s movements are mirrored by the other assets, as most are traded against Bitcoin. Thus, a collapse in Bitcoin invariably means a collapse in the other assets.
In certain quarters there has been derision, stating that this is just another ploy for the mainstream financial sector to try and take control of the price movements. Whereas in other corners, there has been a more accommodating approach to the potential for a Bitcoin ETF. The most commonly discussed point which could emanate from the occurrence of a fully licensed ETF is that it could bring more volatility in the price and also more contraction.
So, where does this leave us? The short answer: confident uncertainty. That might sound like an oxymoron – and most likely is by most scales of logic – however, we have to be able to notice some key trends that have occurred over the past few months. There has been an explosion of money coming into the space and this inevitably causes issues. These issues might serve to destabilise the most prepared projects. However, there are ways and means which can be used to avoid the problems associated with these issues.
How can EAK Digital enable you navigate these uncertain waters?
We want to be your anchor in times of tempest. We want to offer you the chance to keep your head above the water when the clouds begin to circle.
How, you might ask, are we able to do this? The answer lies with you and your project. Difficult circumstances stemming from a market sell-off also leads to a loss of interest – in the wider sense – and may hinder the chance for your project to gain the immediate recognition you would normally deserve. This is exactly where authority branding can play such an important role in securing your position as an expert in your chosen niche, whilst also bringing attention to your project by its very association with your name.
By elevating you to the level of expert status, building your profile as the person people come to for comment when your particular area is spoken about, you are keeping your name relevant even when there has not been so much attention on your project or the space more broadly. In light of the conditions which have been proliferating over past eight months, it is vital to remain relevant and to be seen as someone focusing on the larger picture.
EAK Digital has a team of professional strategists and writers who are able to construct and deliver creative ways to keep your name relevant and your project still in focus. We hope that you have found the content in this post of use and we encourage you to get in touch to organise a free consultation.
Get in touch if you want to book a consultation to learn how we are able to help you. We love hearing from all types of projects are excited to playing such a crucial role in the development of the blockchain space as a whole.
 EAK Digital wants to stress that we do not encourage anyone to invest into Bitcoin and/or related cryptocurrencies. They are an entirely speculative asset class and have the very real potential of going to 0 and people losing all their money.
EAK Digital is a leading Global Blockchain PR Agency that works with Blockchain start-ups to help them gain mass media coverage across both mainstream and crypto publications alike.