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Needless to say, 2017 has been quite eventful for the global fintech ecosystem. From the meteoric rise of bitcoin, to the chatbot invasion, to a host of regulatory changes such as PSD2 in Europe, I could go on and on. Without further ado: here are my predictions for 2018.
Cryptocurrencies’ market capitalization will continue to exponentially rise but...
Many cryptocurrency observers are predicting wild price increases for bitcoin and other digital currencies. For example, TenX co-founder Julian Hosp has recently stated that bitcoin could well reach $60,000 in 2018 and now is a great time to buy at a lower price. On the other hand, Tom Lee, former JP Morgan director is more cautious with his estimations, forecasting $55,000 within five years.
Yet one question remains... will volatility persists? I personally believe so. On December 22 alone, bitcoin, Litecoin, ether, and bitcoin cash all lost more than 30% of their value. At the time of writing, all have partially recovered those losses. Such extreme fluctuations will continue to negatively affect cryptocurrencies’ perception by mainstream financial institutions and their customers.
Further international collaboration among financial regulators
In 2017, we have witnessed several financial regulators from various countries banding together towards participation in regulatory sandboxes. One example which hits close to home is the recent agreement between France's Autorité des Marchés Financiers; and various Canadian provincial regulators including the Ontario Securities Commission and Quebec's Autorité des Marchés Financiers. The deal stated: "The authorities believe that by co-operating with each other, innovation in financial services, investor protection and subsequently competitiveness will be enhanced in their respective markets,".
In the Asia-Pacific region, a similar pact has been reached between the Indonesian and Australian regulators: “The agreement provides a platform to facilitate cross-border exchanges of talent, technology and capital and fintech company market entries into both countries”.
I expect such collaborations to multiply in 2018.
The productization of blockchain
In early 2017, I predicted we would witness a sharp increase in blockchain-related test cases. For 2018, I forecast an explosion of “blockchain products”, notably by established tech companies. A concrete example of this is the Azure Blockchain Service which is offered within the Microsoft Azure Marketplace.
Back in November, Hewlet Packard announced the launch of a blockchain product in 2018 which is being developed via R3's Corda platform. The initial product offering will focus on services such as payments and identity among others.
Fasten your seat belt: 2018 might well be a year packed with fintech innovation and... possible turbulence along the way.