To borrow a phrase used by Queen Elizabeth II, 2018 was annus horribilis for cryptocurrencies. Now that the bubble has burst, if not an annus mirabilis, at least look for 2019 to be the year cryptocurrencies that solve real world problems start to take hold.

Last year the U.S. Securities and Exchange Commission (SEC) extended its regulatory reach towards cryptocurrency tokens. Complete with a newly-minted cyber unit, the federal agency issued subpoenas, charged and fined numerous companies and established first-time guidelines for the exchange of cryptocurrencies.

Meanwhile, Initial Coin Offerings (ICO) failed at a staggering rate. Some, such as Pincoin and OneCoin, were outright scams. Others failed to bring a product or service to market, while others brought a product or service to market that no one wanted or had a flawed business model that caused them to go out of business. Still others were hacked. Total market cap of all crytpocurrencies crashed from $796 billion in January to $129 billion in December as thousands of crypto projects crashed and burned.

Even the granddaddy of all cryptocurrencies, Bitcoin, suffered in 2018. Opening the year at $14,207, it soared to a high of $16,832, before plunging to $3,764 at the end of the year.

In sum: speculators were driven from the market, scams were discovered, and bad ideas, unsustainable platforms and not ready for prime time management went belly up. Meanwhile regulators got serious about cleaning up the cryptocurrency market, otherwise known as the “wild, wild west.” 

But this bloodbath was a blessing in disguise. Considering it a chaffing of the wheat, clearing the way for sustainable cryptocurrency applications that solve real world problems. In this, it’s not unlike the .com bubble bursting almost 20 years ago.

A natural reaction to the massacre of 2018 will be the success of companies helmed by experienced management teams, dedicated to regulatory compliance, and operating with viable business models.

In fact, the cryptocurrency outlook is getting brighter each day. Particularly promising are big brands developing their own cryptocurrencies like what Facebook is exploring for WhatsApp users or Kodak’s KODAKCoin for use on its KODAKOne image rights management platform.  Central banks are also exploring coopting cryptocurrency characteristics into their fiat currency. Also gaining momentum are blockchain applications that help improve payment systems, supply chain management, digital identification, and registries for assets like land titles or cars.

The bear market for crypto last year does not mean an end to this promising technology. Rather, it represents a series of important growing pains that any emerging industry goes through on the way to mainstream adoption.

Moy is on the board of directors of ICOx Innovations (ICOX:V) and ICOx developed the KODAKCoin.

Ed Moy served as the 38th Director of the United States Mint from 2006-2011.