Cryptocurrency investors suffered through what felt to many like a world of pain in 2018: bearish markets; a decline in initial coin offerings; increased regulation. As we move beyond that dreadful year, it's fair to wonder what investors might expect from the asset class in 2019.

BTC/USD Weekly Chart

Many believe it will be another tumultuous year for the cryptosphere. Volatility has become a signature characteristic of and many other popular digital coins, creating more difficulties for traders. Lars Seier Christensen, chairman of Concordium, says the crypto boom-bust cycle of 2017 and 2018 will make life harder for traders in 2019:

“At this point the vast majority of people that invested in cryptocurrency have taken substantial losses and valuation will have a hard time climbing when many traders that have been hurt by the boom-bust are now simply waiting for an opportunity to get out of the market.”

The hoped-for, widespread adoption of cryptocurrencies may not occur either, as uptake likely slows. Nonetheless, Yoav Dror, CEO of PumaPay, is optimistic. He believes 2019 will be a turning point for digital currencies.

“We'll be seeing an increase [in] usability of cryptocurrencies. They will become applicable and convenient to use in day-to-day life. We have been seeing the signs and promising examples of this long-overdue trend throughout 2018.”

Gobal Regulations, Compliance Will Increase

Many crypto analysts also think 2019 will be the year of regulation. There's certainly been a a growing demand for clarity on cryptocurrency compliance. Dror expects investors will begin to see more regulatory transparency, providing significant benefits for all stakeholders and potential investors. Says Dror:

“Both of these factors, usability and clearer regulation, will converge to drive mass adoption of cryptocurrencies by merchants and consumers alike.”

"We've already witnessed a watershed year for crypto in terms of regulation," says Cobus Kruger, CEO and co-founder of Stackr, a global long-term savings platform, but it hasn't yet been sufficient. He adds:

"It's imperative for survival and growth. Without regulated instruments like an ETF, the industry will tread water, because there will only be insignificant institutional adoption."

This leads to perhaps the most hotly debated issue of 2018: will the U.S. Securities and Exchange Commission (SEC) finally approve a Bitcoin ETF? Alex Mashinsky, CEO of Celsius Network is optimistic this could happen in 2019, as well as a variety of other advances.

“We will witness the first SEC approved ETF, the first Wall Street bank to offer BTC accounts to customers and for the first time we will have over $50 million in crypto wallets. Beyond Wall Street, we will witness major pensions and endowments also allocating capital to BTC as prices will begin to rise back above $6,500.”

Another related investor concern likely to be addressed is cryptocurrency custody and the safeguarding of crypto assets. Over the years there have been numerous exchanges hacked and millions of dollars worth of funds stolen or compromised. Better custody solutions would help improve the case for institutional investors to enter the sector.

Says Kruger:

“We can expect custody solutions to continue to grow, this is a must and prices for custody to decrease. Also, there will be more consolidation, especially in the exchange space, as well as more regulated players, while bad actors and peripheral players and service providers will disappear.”

Expanded M&A Activity

Crypto sector M&A activity is also expected to accelerate. In the next market cycle, says Robert Viglione, CEO and co-Founder of Horizen we’ll have more mature organizations that can use M&A to help them grow during this downturn.