One of the largest phenomenons of 2017 was the rapid rise of Bitcoin and its ability to attract headlines and hype on its way to reaching a near $20,000. But, having hit such heights in mid-December, the cult-status cryptocurrency has taken a bit of a tumble so far this year.
From continuing as the lead maverick of the financial world to possibly being ousted by smaller siblings, here’s what you can expect from Bitcoin in the next 12 months.
Bitcoin will still reign supreme
At the end of 2017, Bitcoin was unstoppable in both its growth and dominance, but since then it’s dropped away in both respects as other, much smaller cryptocurrencies, such as Ripple, Stellar and Tron, have surged hundreds of percent in the last several weeks, bringing the total market value of all digital coins to above $770 billion.
Despite the growth of altcoin, however, Bitcoin remains to be the most prominent and talked about currency; and since it boasts this status, it’s often the gateway and first port of call for new investors. With interest growing exponentially, this can only be a good thing for Bitcoin.
Bitcoin will reach $50,000
Dennis de Jong, the managing director at online trading broker UFX, said that despite the blip over the Christmas period, there “really isn’t a roof on how high bitcoin can climb in 2018”.
“Given the unexpected speed at which it rose towards the back end of last year, it’s difficult to put an exact figure on what it will reach, but we certainly could be looking upwards of $50,000 in 12 months’ time,” he said.
This wouldn’t come as a total shock given that Bitcoin grew twentyfold from $1,000 at the beginning of 2017 to almost $20,000 just before Christmas.
Bitcoin will be seriously challenged by rivals
De Jong added that other cryptocurrencies, like Ethereum, could see “rapid gains” in 2018.
Iqbal Gandham, UK managing director at eToro, a social trading and investment network, echoed the same sentiment.
“In our view, bitcoin is unlikely to steal so much of the show this year. Building on the momentum from last year, it is likely that investors will increasingly consider additional cryptocurrencies such as XRP [Ripple], ethereum, litecoin and dash as part of their portfolios.”
Such predictions make sense, given that in 2017 the total sum of all cryptocurrencies in circulation rose over 3,000 percent. This trend currently doesn’t seem to be reversing, so in the next 12 months expect more retailers, governments, banks and financial organisations to embrace blockchain technology (a digitised, decentralised, public ledger of transactions) which will, in effect, ramp up investor confidence.
Moreover, Ethereum co-creator Steven Nerayoff said businesses in a wide variety of industries are starting to take note of what value his company could offer them. He also attributes increased usage to Ethereum’s ability to process transactions more quickly and cheaply than its rival.
Bitcoin (and other cryptocurrencies) will be heavily regulated and its price will drop
Harvey Pitt, the former chairman of the US Securities and Exchange Commission (SEC), says that the regulatory body is cracking down on suspicious activity – and this will only continue.
“We’re in line for some serious regulatory responses to all of this [rapid growth] and that will be forthcoming after the first of the year ,” Pitt said late last year.
This prediction follows months of the SEC becoming increasingly vocal in warning investors about the risks of cryptocurrencies. In December, the SEC temporarily suspended trading in shares of The Crypto Co., whose stock has surged more than 2,700 percent that month. Moreover, the Financial Industry Regulatory Authority (FINRA) has also issued guidelines to help investors getting scammed by “aggressive cold callers.”
Additionally, when China cracked down on digital currencies last September, Bitcoin fell by more than $2,000, so expect a similar trend if regulators begin to clamp down in this corner of the hemisphere.
Spencer Bogart, managing director and head of research at venture capital firm Blockchain Capital is predicting big losses in regulation, stating: ”I think we could easily purge 60-75 percent of crypto hedge funds in this type of market.”
Bitcoin will continue to be volatile
You can’t talk about Bitcoin without mentioning its volatile market nature, and although it’s older and wiser, it’ll still be mercurial and fluctuate due to the fact is has no financial body to regulate it.
Following their December high, Bitcoin prices collapsed shortly afterwards, losing a third of their value in a single day, briefly sinking below $11,000 before regaining some of the ground lost.
As more money gets pumped into Bitcoin and Bitcoin splits (versions of Bitcoin which were developed to increase the capacity of its underlying technology), the bubble will get bigger and cause dips and rises from one extreme value to the other.
Bitcoin will be accepted on Amazon
Finally, it looks like e-commerce juggernaut Amazon will soon accept Bitcoin as a method of payment.
The company hasn’t announced anything yet, but its legal department is currently listed as the registrant for the .com domains amazonethereum, amazoncryptocurrency, and amazoncryptocurrencies.
Patrick Byrne, the CEO of Overstock, has stated that Amazon will soon have no choice but to start accepting it: “They have to follow suit. I’ll be stunned if they don’t because they can’t just cede that part of the market to us if we are the only main large retail site taking Bitcoin.”
Scott Mullins, an Amazon executive, has confirmed that his company is, “working with financial institutions and crypto-experts to spur innovation, and facilitate frictionless experimentation.”
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