2019 may be the year that the cryptocurrency market sees the entry of large institutional investors. With more and more countries regulating the market and a large number of countries in deliberation of the same, this year is poised to be a much better year for cryptocurrencies and the market as a whole.
Once institutional money enters the cryptocurrency market, the liquidity of the market will be a lot better than it is in the current state. Along with that, there will be a lot of securities that will be tokenized.
The Rise Of STOs
The past year, we all were witness to the rise of security tokens. Many investors of the cryptocurrency market were more likely to invest in STOs than ICOs because they were, as the name suggests, secure.
The tokenization of securities is something that is somewhat a new trend in the market. But it is catching up fast. In order to do so and offer these tokens, exchanges have to be regulated.
Because of this requirement a lot of exchanges are applying to be regulated. On the list are exchanges like Coinbase, Australian Securities Exchange, etc.
STOs are Harder to Execute
A common misconception in the cryptocurrency market is that STOs can be easily executed and is as easy as an ICO.
But this is not the case. Because to be able to conduct a proper STO, the company needs a solid cash flow and has to be sure of what it wants to achieve in the long run.
While STOs is a great way to go for investors, as an entrepreneur it may not be the best option. Regulations are also a lot tighter in the cryptocurrency market for STOs.
But the flipside for STOs is the fact that it encourages the entry of institutional investors. And with institutional investors comes a lot more money.
In the trade off the STO is the better option in the long run. Because money is vital to startups in the cryptocurrency market.
More Exchanges Want to Be Regulated
One of the worst characteristics, from the point of view of governments, is the fact that exchanges and the cryptocurrency market refuses to be regulated. The reason for this is because institutionally they reject centralisation.
However, with the rise of STOs more and more exchanges want to be regulated. Because only then they are allowed to offer STOs on their platforms.
With that in mind, it seems like the rise of STOs inadvertently will help the market into some favourable regulation. Along with that, STOs will bring a lot more money into the market. Overall, the next logical step for exchanges that want to support STOs is regulating themselves.
And that seems to be the ongoing trend in the cryptocurrency market as of now; STOs are pushing exchanges to get regulated.
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