Foresight 2020: 15 predictions for the year from OSL and BC Group

In 2019, the digital asset market had perhaps its most interesting year to date. Major events occured, such as the announcement of Facebook’s Libra, China’s foray into the token space and introduction of FATF requirements for digital asset regulation. The sector also saw more token price volatility spikes as well as the emergence of fast-paced digital asset options, futures and lending products as new ways for investors to find yield in a rapidly changing marketplace.

With 2020 set to be full of new and exciting milestones and developments, we asked the senior leadership at BC Group and OSL to share some of their predictions for the year ahead, and posted these on our social channels throughout the month. The full list of 15 predictions covers a variety of topics, from regulatory to products and services, and can be viewed below:

January 7: Institutional Participation in Digital Assets 
By BC Group Executive Director Dave Chapman

  1. Traditional finance will continue to invest in blockchain and digital assets globally in 2020 – specifically there will be an increase in activity from large, Asia-headquartered financial institutions
  2. Interest and use of stablecoins will accelerate with a number of banks governments issuing proprietary coins to the market
  3. Digital asset custody has largely been solved, and 2020 will see players increasingly rely on quality custodians, the best of which will begin to dominate market share

January 9: The Digital Asset Market
By BC Group CEO Hugh Madden

  1. Thirty percent of existing operators in the digital asset market will cease operations and markets will concentrate towards the largest venues
  2. Newly regulated digital asset financial institutions will emerge and accelerate the adoption of Bitcoin and Ethereum into regulated asset manager portfolios
  3. Portfolio managers will realize the power of the ‘born digital’ generation, with no less than eight major funds offering products that include digital assets

January 13: Digital Asset Products and Services
By OSL Head of Trading Ryan Rabaglia

  1. Staking-as-a-service will further popularize and earning interest from token lending will continue to dominate the market as investors search for yield in volatile times. Look for the token lending sector to grow 10x in the coming year.
  2. Following the trail blazed by Bitcoin futures in 2018-19, Bitcoin options will establish itself as the next big liquid trading market in 2020.
  3. Prime brokers will emerge as the most trusted intermediary for institutions entering the digital asset space. With regulation a near certainty, reputable digital asset trading service providers will be more in demand than ever, with daily trading volumes hitting USD500 billion

January 16: STO’s, BTC Price, Exchanges
By OSL CEO Wayne Trench

  1. STOs will emerge as the next significant global digital asset market with Asia playing home to the world’s largest STO 
  2. Bitcoin will again reach USD15,000
  3. Digital asset regulation will have a major impact on exchange flow consolidation and at least three major traditional finance institution will offer digital assets directly to its clients

January 22: Legal and Regulation
By OSL Head of Legal Melody Ma

  1. Digital assets will continue to become more integrated into global finance as legal structures that involve charging or pledging digital assets will become a common feature in lending and financial transactions
  2. Financial intermediaries such as exchanges and broker-dealers will be granted licences in several jurisdictions to deal in security tokens, and first-mover markets will have a distinct competitive advantage
  3. Use of captive insurance by digital asset custodians will increase and firms will seek out for geographies with the most favourable regulatory frameworks for capture insurers