Insight into the 2020 Cryptocurrency Market
Insight into the 2020 cryptocurrency market: The industry ecosystem shaped by users gradually takes form.
From the latter half of 2018 to 2019, many quantitative funds closed due to immature strategies or inadequate hardware and software technologies. Facing market turmoil, Kronos Research, leveraging its robust trading infrastructure and technical team, successfully weathered the downturn of 2018 and achieved a daily trading volume of $1 billion in early 2020. The future development of the cryptocurrency market holds immense potential. Looking back at 2019, research firm Digital Assets Data highlighted that cryptocurrencies outperformed most traditional asset classes such as gold, oil, and stocks. Bitcoin saw over 100% growth in market value, while Ethereum increased by 35%. With the upcoming Bitcoin Halving in 2020, new energy is poised to enter the market.
The top ten cryptocurrencies in 2019 outperformed most traditional asset classes, such as gold, oil, and stocks (Image source: Digital Assets Data
The top ten cryptocurrencies in 2019 performed better than most traditional asset classes like gold, oil, and stocks (image source: [source]).
The entry of traditional financial institutions has further enlivened the cryptocurrency market. Not only governments and large corporations are exploring the issuance of their own cryptocurrencies (e.g., Facebook's Libra, China's DCEP by the central bank), but traditional financial institutions (e.g., asset management company Fidelity, venture capital firm A16z) are also investing in the cryptocurrency sector.
As the market gradually takes shape, more participants will enter the cryptocurrency industry, forming a more mature and stable ecosystem. As one of the top ten global cryptocurrency trading volumes, Kronos Research believes that the participation of traditional financial institutions and investors will drive the vibrant development of the cryptocurrency market. While this may intensify competition, the use of exchanges by more institutions and traders will lead exchanges to provide more professional technology and stricter regulations, ensuring more stable and secure trading environments. Overall, this trend is highly favorable.
In the face of intensified competition in the cryptocurrency industry, Kronos Research also believes that quantitative trading teams must continue to enhance their technological and research capabilities, develop a variety of trading strategies, and adapt to market demands and rapid changes. By combining multiple strategies, Kronos Research aims to assist investors in making optimal investment decisions and maximizing their profits under different market conditions.
The legality of cryptocurrencies remains a focal point. Fee-free exchanges are becoming a future trend. As many companies and countries have begun developing cryptocurrencies, legality remains a significant concern for the industry. While Japan passed the Payment Services Act (PSA) and the Financial Instruments and Exchange Act (FIEA) in 2019, officially declaring cryptocurrency trading and payment as legal activities, most countries have not yet clearly defined the legality of cryptocurrencies, leading to widespread skepticism among the public. Clarifying cryptocurrency regulations in the future is expected to maximize the value of related technologies, apply them in more diverse fields, and enable governments to better regulate the cryptocurrency industry, eliminate illegal financial activities, dispel doubts, and provide more development space and opportunities for the market.
Facing a more competitive market, fee-free exchanges are also becoming a trend. In the future, exchanges will optimize user interfaces and trading experiences, and offer lower transaction fees to gain higher market share and meet user expectations. Therefore, it is expected that exchanges will increasingly cooperate with dark pools and other trading platforms. By receiving rebates from trading platforms, exchanges can offer fee-free promotions without reducing their revenue, while trading platforms can gain more liquidity, forming a mutually beneficial ecosystem.
Jack Tan, co-founder of Kronos Research, stated: "WOOTRADE, the dark pool trading platform incubated by Kronos Research, is a prime example. WOOTRADE gained significant market attention in 2019, receiving funds from top venture capital firms such as Fenbushi Capital, HashKey, and DFund, and is currently in discussions with over ten cooperating exchanges, aiming to introduce products and services that meet user needs in the future."
Mark Pimentel, co-founder of Kronos Research, shared at the annual investor and customer banquet: "Looking at the 2020 cryptocurrency market, Kronos Research expects to drive growth across all cryptocurrency industry partners, providing higher-quality, reliable, and secure trading services to the market and customers. We will develop more diverse strategies and trade on more exchanges."
Mark Pimentel further stated, "Kronos Research stands out in the cryptocurrency trading market thanks to our strong technical team and collaboration with many industry partners. It is through such robust partnerships that we thrive, and we are honored to work with partners to contribute to the development of the cryptocurrency market. In 2020, we will continue to establish partnerships with more companies to make the cryptocurrency ecosystem more complete."
