GCR

The holidays and New Years are around the corner, and Global Coin Research is delighted to present you again this year with our community predictions for 2020, from founders, executives and investors with deep knowledge, and influence in the Asia markets and the rest of the world. In their predictions, they share their outlook on the exchange and trading landscape, de-fi vs ce-fi, protocol development and more.

The Global Coin Network has been a robust community and an inspiration to our team and our work, we here thank all the contributors below for taking the time to share us their unique outlook and insights.

In 2019, we at GCR are especially thankful for you, our amazing and ever-growing readers and subscribers community. Happy holidays and Happy New Year to you and your family!

Predictions below are arranged by alphabetic order:

Vansa Chatikavanij , CEO of OmiseGO

 In 2019 we saw big progress in terms of development in decentralized finance (DeFi) – the value locked into DeFi projects reached new historical heights. But factors such as lack of product/market fit will likely to slow down the natural growth of DeFi in 2020. However, through the development of layer 2 solutions like the OMG Network and the consequential higher scalability on child chains I see the potential to link digital assets with other traditional assets (such as fiat, stock, and other commodities) and by that send DeFi adoption on its next big journey.

Jason Choi, Head of Research, The Spartan Group

-Projects with existing traction for their related products will revamp outdated 2017 token models to better tie development to token price

-DeFi borrowing volumes will increase as more stringent KYC barriers get erected for speculators’ go-to exchanges for leverage

-Asian countries will follow China’s lead in introducing sandbox environments and resources for blockchain companies and developers

-Top 20 highest average daily tx volume dapps will all be speculation related (dex, borrowing/lending, gambling)

Justin Chow, Global Head of Business Development, Cumberland

 2020 is shaping up to be an exciting year and one that we expect to be filled with high volatility.  There are many factors and forces in play right now that could take the market, which is still in its early development phase, in either direction. We have started to see more regulatory bodies taking further action to clarify how they will regulate the space, including through some enforcement action. 

We believe this may put some pressure on liquidity in the short-term, but is healthy in the long-term as the industry will continue to mature. That will likely mean we will see an increase in the amount of headline risk over the next few months, but we are hopeful this will taper off as the year goes on.  On the other side of the equation, we’ve been speaking with a number of established financial institutions and traditional market investors who are still keen on better understanding the space. Whether or not they actually allocate capital to crypto in 2020 remains to be seen, but it’s encouraging to see they are still following the developments.

Andrew Fai, Founder of Asia Blockchain Summit and CEO of OBITO.IO

Crypto exchanges should be making their moves into fintech – payments and banking. namely starting with debit/credit card issuance, lending, collateralized loans, bonds, and robo advisory.

I also think FATF would start penalizing crypto exchanges with big fines.

Liu Feng, Chief Content Officer, Chainnews and Co-Founder of  Blocks.tech 

The re-surfaced narrative of “blockchain, not bitcoin” will accelerate investments in permissioned blockchains in China. But the boom-bust circle of this investment bubble will be short-lived if DC/EP, China’s Central Bank Digital Currency, cannot be successfully launched in 2020.   

See Eun Ha, Co-Founder & CEO – nonce Foundation 

Regarding the Korean market, the Korean government is still pushing the deprecated “blockchain, not bitcoin” narrative to foster the industry. As a result, those projects who are pushing the envelope will incorporate outside the country and receive funding from non-Korean entities. A clear line will be drawn between what’s in the system and what’s not.

After the legal amendment to the Special Financial Transactions Information Act (https://www.coindesk.com/south-korea-takes-legal-step-to-stamp-out-unregistered-crypto-exchanges) passes, Korean crypto exchanges will become part of the greater financial system. However, if regulation doesn’t keep up in the areas of derivatives, staking, and other complex financial products, stunted growth looms in the near future.

Jason Han, CEO of Kakao’s Blockchain Business, Klatyn GroundX

2020 will be the year to prove the value of blockchain. Particularly, we will be witnessing enterprise-initiated blockchain use cases, and we Klaytn are also working with our partner enterprises and Klaytn Governance Council members in advancing mainstream blockchain adoption. We can also look forward to seeing innovations in traditional industries including blockchain-based identity authentication and digital voucher/point system.

Arthur Hayes, Co-founder and CEO, BitMEX

2020 and beyond will be the age of fiscal policy. Leaders will build stuff and employ humans, driving up demand for raw materials and inflation. Given that Bitcoin is both a financial risk-on asset, and a scarce commodity, in either a gargantuan fiscal or monetary expansion I believe that it will continue to re-emerge and thrive in 2020.

 Ben He, CEO of ImToken

2019 was an exciting year for decentralized exchanges, both the number of DEX users and DEX volume grow tremendously compare to that of 2018. One of the main factors is the growth of DeFi. These emerging decentralized financial use cases, such as lending and borrowing benefit from decentralized liquidity and their adoption, in return, contribute back to the decentralized liquidity. We believe the positive feedback loop will continue to build momentum, and DEX will become much more prevalent in 2020.

Thomas Heller, Head of Business Development for F2Pool

Compared with the previous two bitcoin block reward halvings in 2012 and 2016, the May 2020 block halving is going to have a much larger impact to the players in the mining industry. The forward-focused mining operators have already transitioned to new-generation hardware and have done what they can to secure long-term power contracts at very competitive prices. Inefficient mining operators are going to be squeezed out in 2020, and this will present opportunities for well-prepared operators to capitalize and grow.

In 2019, the bitcoin price, new mining hardware and expansion of existing operation, lead to an increase in the proportion of bitcoin network hashrate in China compared to the rest of the world. In 2020, we will see an increased growth in non-Chinese markets, particularly Canada, Kazakhstan, Russia and the USA, as new sites come online in 2020. 

All-in-all, a very exciting time to be involved in bitcoin, and bitcoin mining!

Junya Hirano, Co-founder and CEO, HashHub Tokyo

Japanese exchange has been very restricted in these 2-3 years, but it will change next couple of months, with new coin listing and regulated IEO, etc.

I think other ecosystems will change as an exchange will change. Other than that, enterprise blockchain and security token is coming.

Mable Jiang, Principal, Multicoin Capital

 2020 is a critical year of crossroad where some infrastructure will find their composability and modularity fit in different use cases. Localization and professionalization will coexist with the trend of industry merger and consolidation.

I hope and think it will be a more product-oriented and application-focused year. Tools, SDKs, and middlewares that provide better support to developers who build on top will become more prevalent. NFTs (in a broader entertainment sense) were talked about for a few years now but the market (for the real competitive products) is still quite of a blue sea.

I don’t know when the first case of tokenization of a cash-flow-positive company with the need of a work token model will happen in Asia; it may or may not be 2020. Yet, I’m still hopeful for the day of listing such tokens at a regulator-blessed exchange coming up soon, because that’s the kind of crypto asset that capture real value when we talk about mass adoption.

Simon Seojoon Kim, cofounder and CEO at Hashed

Regarding the Korea market, Korea has transformed from a cryptocurrency jungle to an institutionalized testbed in 2019. In China, we are seeing more positive movements since Haikou city has been designated to become China’s first blockchain pilot zone by the Chinese central government. Under these environments, we believe platforms with messenger linked blockchain protocols such as Kakao’s Klaytn with 50million active users and LINE’s LINK with 180 million active users to bring greater influence into the market and the regulators across Asian borders. 

Kelvin Koh, Cofounder and Managing Partner of Spartan Group

-BTC price will hit $40K during 2020.

-Filecoin and Telegram will see the biggest market value destruction in 2020

-Staking fees will be close to zero by end 2020 and half of the independent stakers will be out of business.

 Caleb Kow, CEO of Tezos Southeast Asia

2020 would represent a year of massive onboarding people new to the space. This marks a mindset shift in folks who knew about blockchain but have not taken first steps, as technological use cases are now more prevalent coupled with the rise in the consumerism of blockchain applications. Many who never came from the POW world would also start to explore staking for the first time and enjoy the seamless process.

Tiantian Kullander, Founding Partner, Amber Group

We see a large-scale decoupling of prices; breakdowns in correlations across the likes of XTZ, ATOM, DOT, ALGO vs the rest of the space. In turn, this gives rise to the emergence of staking derivatives. Maker collateral surpasses $1bn. Uniswap sees a $100mm volume day. We see at least one crypto game/social experiment grow to 10x the size of FOMO3D. Growth in futures open interest and popularity of the basis trade translates into a market-wide unwind, steepening contango spreads to new all-time wides.

Mark Lamb, CEO of Coinflex

The derivatives market will become the dominant place for borrowing and lending, trade volumes will become 20 times larger than spot, and the surface area of trading opportunities will increase substantially.

It will give investors opportunities to place large short bets on the market and invest in crypto volatility without being exposed to crypto’s prices.

Jocy Lin, Cofounder of IOSG Ventures 

Layer1 innovation will be more differentiated in the coming year?developer communities?founder leadership?good use case/user experiences?design of scarce token economics all is important for every protocol. Creating user demand—— it’s time to learn more use case innovation from China mobile Internet story (JieDian/AntForest). IOSG Venture is an early-stage fund for decentralized protocols and startups, covering Defi insurance, Blockchain interoperability, community Governance tokens.

Vincent Niu, founder and CEO of DappReview

There’ll be more aggressive moves for the traditional BIG PLAYERS in Asia to enter the crypto world, which could bring the blockchain application to mainstream users in a natural and easy way. And I’m looking forward to see the real killer dApp next year.

 Yusuke Obinata, Founder of CryptoAge and NodeTokyo

In Japan, we will see more enterprise use cases of blockchain by the large corporates partnering up with the local startups. Would be also interesting to see how SoftBank’s Yahoo! Japan & LINE merger will play out – it could have a big impact as they both have licensed crypto exchanges and the largest online consumer products. Southeast Asia will see more official licensed exchanges following the regulations in Singapore or Japan and I hope to it will boost more real world adoption of crypto ahead of other places in the world.

Bobby Ong, Co-founder and CEO of Coingecko

In 2020, we should expect to see strong DeFi growth continuing. Total Value Locked in DeFi apps on the Ethereum blockchain will exceed over $1 billion. We will see over 100 DeFi apps by the end of the year and DeFi apps will also appear on other smart contract platforms. However, we will be reminded of the risks of DeFi apps and it would not surprise me if at least 1 DeFi app will get hacked next year. DeFi insurance / derivative markets will grow as a result to better handle these risks.

Alexander Pack, Founding Partner, Dragonfly Capital Partners

Xi’s announcement has created a major strategic realignment in China towards blockchain. October 24th will go down as one of the most important days in crypto and for the China technology sector overall, but it will take a few years before these effects become visible. In 2020, it will likely result in many headlines and flashy experiments from government agencies, SOEs, and large corporations around enterprise use cases and top-drown consortium chains – yet, just like in the US, with ultimately little to show for it. The most important product launch will be the DCEP, the digital yuan.

China’s recent bans on foreign computer technology and its goal of building its own tech infrastructure will extend to the blockchain space. We will see a surge of interest and genuine usage on the technologically strongest “Ethereum for China” chains.

In the trading space, Asia dominance is already at an all-time high. It will stay that way.

The biggest crypto companies will platformize and grow vertically into each other’s use cases. The end state will look like massive financial portals and crypto quasi-banks that offer a wide variety of crypto-denominated financial products and services both centralized and decentralized – trading, derivatives, structured products, lending, custody, research, news, and much more. There will be more consolidation in the exchange landscape, both from a lack of new entrants and a surge of M&A activity from the largest ones as they grow internationally.

Mining will move steadily away from Asia and into geopolitically stable jurisdictions such as the U.S. and Canada, although the bulk of hashrate will still be in Asia.

Chao Pan, China head of MakerDAO

In 2020, I think there will be more couplings of DeFi and traditional finance. ETH 2.0 is an interesting game changer. I hope to see credible ETH staking pools in Asia providing various DeFi services that expand the market scope and Maker collateral types.

Bowen Wang,  Co-Founder of DDEX

We will see more collaboration between Centralized custody institution and DeFi projects since it combines both flexibility and transparency. We will see more collaboration and consolidation among projects to create more synergy.

Kevin Wang, Co-founder of Nervos Network 

I see 2020 is the year that Asia is going to lead the way for blockchain adoption, and hybrid “on-chain / off-chain” solutions are going to play a big role.

 Xin Xu, CEO of Sparkpool

PoW side I think in the next year, mining business will be more robust as more institutional players are joined and more structured financing tools are now involved in PoW business.

PoS side I think how to combine DeFi and Staking together will be very interesting to look into.

Mindao Yang, Founder dForce and Blockpower Capital

 ·         China will likely build its own segregated blockchain ecosystem by supporting a variety of fully regulated federated blockchain platforms centering around government services and financial applications and China is also possible to issue regulated exchanges license in 2020.

 ·         DeFi protocols will continue to iterate and prove its value in 2020, DeFi will be greatly integrated with CeFi in 2020 and there could be adoption leap as a result of the integration.

 ·         A number of notable public blockchains will launch its mainnet in 2020 (i.e. Filecoin, Telegram, Libra, Polkadot etc.) we will see a new flush of interesting protocols and applications building on top of these new platforms. 

 ·         Global regulation is catching up with a focus on stablecoin and exchange, large scale global regulatory coordination in 2020 looks pretty predictable.

 Eric Yoo, Chief Strategy Officer, DXM Partners [Sister company to Upbit the exchange ]

Regarding Korea, sanitization (filtering) with the introduction of regulations: If the Special Act on Financial Innovation is passed, requirements to pursue business from Korea and especially “what not to do” will get much clearer. As a result, those who can stick up to the aforementioned will likely rise whereas the opposite will face the harsh reality.

Overall trading in Korea so far was driven by retail given the lack of clarity and infrastructure for more sophisticated money to come in. While it is too early to hope on a sudden explosive inflow of what we call “sophisticated money”, retail gun powder either dried up or they’ve learned the lesson so expecting more of a “flight to quality” stance.

CZ, co-founder and CEO of Binance

 1.  Adoption expectations in 2020.

There is a growing amount of governments across the globe examining blockchain and cryptocurrencies, including stablecoins, as well as self-regulated and global regulatory standards, which indicate more widespread public adoption. I think in 2020, we will see different experiments tried by many different governments around the globe for adoption, some will work, some may not, but overall, they will have a tremendously positive effect for crypto adoption.

 2.  Expectations on market prices and where it’s headed; bull or bear run in 2020?

There are many different perspectives on the future of the market. Bitcoin is still a small market cap instrument so there will be high volatility in the short term. However, if you look at the fundamental technology, the longer-term view, about a 5-year or 10-year horizon, we’re very confident that bitcoin and cryptocurrencies are here to stay. In fact, blockchain will have a bigger impact on society than the internet. The industry will get bigger and when the industry gets bigger the price will go higher. We are also seeing an increasing amount of interest from institutional players which also indicates a more bullish market in 2020.