Bitcoin is not off to the best start. The cryptocurrency just had a low of $7,700. Compare that to the record highs of last year and you will have more people panicking.
But as I wrote in my article on “The 4 Problems With Bitcoin Investing”, Bitcoin is volatile. Cryptocurrency is shaky because of different factors such as hackers and a lack of regulation. But that could change in the future.
In 2018 and beyond, I predict these things will happen either this year, or next year. And if it doesn’t happen in the next few years, it has a strong possibility of happening in the next 3-5 years.
As Bitcoin gets more popular and builds more familiarity with the mainstream, more people will get into Bitcoin. This is just common sense when you think of Bitcoin as a growing brand.
As more people get into Bitcoin, prices will surge once again. More people equals more demand. And when more people want something, demand goes up. When demand goes up, price and quantity surge.
It’s economics 101.
I don’t want to talk your heads off so here are are my predictions:
1. Bitcoin And Ethereum Are Not The Only Ones
New crypto coins pop up left and right. It seems like a new day brings a new coin these days. But the coins that’ll remain are the ones that make it easier to use crypto coins in the environment we live in.
For example, imagine dollar bills. We can use dollar bills to buy whatever we need. Water, food, entertainment, and whatever else we want. Cash goes hand in hand with the environment we live in.
Although the current environment is making it easier to live using crypto, it isn’t everywhere we turn. The coins that can make their function more useful to the coin holder will compete with Bitcoin and Ethereum.
2. Regular Crypto Traders Will Lose
Now I know this contradicts with what I was saying about prices rising, but hold on. As the crypto community grows, it’ll become more mainstream. This will interest institutional investors who have way more money than a regular person.
New tools like algorithms, analytics, and equity traders will take over. Competing against all of this requires the best technology and the smartest people.
Finance attracts a lot of smart people because it PAYS.
Keep that in mind.
Big institutions like Goldman Sachs are investing hundreds of millions of dollars in the crypto space. Financial tools such as derivatives will also become part of the cryptocurrency world.
Anything that can make money is what these institutions are after. And we’ve seen that with our past recession.
3. Crypto Will Get The Majority of Capital Investment
Initial Coin Offerings also known as ICO’s require minimal investment compared to traditional businesses. Brick and mortar require overhead while ICO’s have technology to operate which require little to no overhead.
Having little to no overhead makes it easier to invest the business in other areas. Focusing on other needs instead of utilities gives a business a higher chance of succeeding.
Venture capitalists see that and believe ICO’s are the way to go. The whole point of a venture capitalist is to make as much money as possible for their clients and their firm.
Having that ability to put capital and generate an ROI faster is undeniable. We’ve seen technology scale and what impact it can have on the world. Crypto and the emerging technologies surrounding it is no different.
4. Doggecoin Will Go On A Steep Fall
Doggecoin is a underdog story. Coming from a funny meme in the crypto world to a market cap of over $800 millions dollars, Dogecoin is a powerhouse.
But one critical piece is missing. Their founder Jackson Palmer left the company in 2015 and ever since their code has stayed the same. This is important because as I mentioned earlier, coins need to be more useful.
They need to be in our environment instead of a new trend. And not being able to strengthen their code will result in not being able to adapt.
Dogecoin is seen as a parody coin and “Shiba Inu Dog” is its mascot which makes it even seem like more of a fluke.
Another big factor is Dogecoin’s success is dependent on Litecoin’s hashing power. The stronger Litecoin’s hashing power means the better Dogecoin’s security gets.
Depending on another coin’s success is not a good business plan. This is equivalent to wanting your competitor to win. How are you suppose to win if you’re focused on what others are doing?
And even with the new updates announced by the Dogecoin team, they still have to play catch up with the other coins.
Dogecoin’s rise is my opinion is due to hype. Marketing itself as the meme coin attracts a community that’s in it as a big joke. I’m sure it’s not built for success. Even analysts know that’ll go down because of charts like this:
Recently though, Dogecoin’s coding team has been talking of new updates to the code but they need more coders, most of their competitors already have a head start on them.
5. Bitcoin will reach $100k by late 2018 or early 2019
Finance experts are predicting big things for Bitcoin and one of them is James Sowers. Sowers is an ICO expert advisor at Blockchain Advisory Council and he believes big things will happen with Bitcoin.
Bitcoin hitting $100k by the end of the year definitely seems like a stretch but let me give you the reason why experts are saying this.
The Danish firm Saxo Bank predicted the coin would go from $900 to triple its value in 2017. Now it seems their prediction for 2018 is the coin will 10X its value over the course of the year.
Keep in mind that when they made the prediction in 2017 for Bitcoin, they said the value would rise because inflation and the U.S. dollar would soar.
Looking back on it, both never really came to fruition.
So it’s okay to be skeptical when hearing these predictions. But keep in mind that 2018 is the year in which institutional investors get in the game. Financial tools like Bitcoin futures will pour more money into the crypto world and it doesn’t seem that far-fetch to see it come true.
If I was an investor though, I’ll take what James Sowers says and diversify my crypto holdings.
He advocates for diversification in the crypto world because of the volatility. Just like stocks and real estate, making sure all your eggs aren’t all in one basket will save you later down the line.
The Future Of Cryptocurrency
I’ am definitely not an expert in the world of cryptocurrencty but if history is an indicator then we can see a big spike in prices for Bitcoin.
Saying it’s going to a $100k isn’t out of reach. Crypto coins alone have changed the world of venture capital. Instead of venture capital firms getting first dibs on the next up and coming startup, they’re right next to us on the sidelines fighting for position to make their investment.
All this jockeying for position forces venture capitalists to spread their money around the digital world. If they can’t make their investment, they could potentially lose out on the next Amazon or Facebook.
It’s a lose-lose situations for venture capitalists.
This forces more money into coins who might pan out in the future. One instance of this is Telegram where they’re making a cryptocurrency that facilitates in their own application.
The risks comes because investors don’t know if Telegram will succeed.
As I’ve said earlier in the post, having a coin that doesn’t have multiple functions won’t survive as long. But having it as the main currency in an application has a chance. These two contradicting points are part of the logical process venture capitalists go through.
Now imagine regular investors who are trying to decide whether to get in the game or not. Besides all the analysts and machines institutional investors deploy, how can a regular investor compete with all the capital institutional investors put in?
In addition, who do you think will get the first whiff of any coin gaining steam? Institutions or individuals?
Of course its institutions, and the reason is because they have a bigger network. The faster they know, the faster they can put money in and dilute regular investors.
This cycle reminds me of the stock market where most of it is ran by machines.
Regardless, only time can tell what really happens in the cryptocurrency world. We can have all the facts and analyze history, but we’re not fully sure what can happen in 2018 and beyond…