After a crazy 2017 for cryptocurrencies, Bitcoin hitting the near $20,000 mark and many other altcoins experiencing bullish trends, it is important to take a closer look at what the next 12 months hold for crypto investors. Will the trend fizzle or will there be more to come? These predictions are based on what happened from the last couple of months. And hopefully, this could also help you in your decision when you invest in digital currencies.
Institutions Will Be Interested in Digital Currencies
There is a growing interest on the part of institutions to adopt digital currencies. In fact, there are institution-level investment products that are related to Bitcoin. There are the CME and Cboe Bitcoin futures contracts launched last December.
There is also a possibility that we might see an approved Bitcoin exchange-traded fund especially once we enter the second half of 2018 and even early 2019.
According to Nolan Bauerle, the director of research at CoinDesk, “with regulated futures market going live in 2017, the stage is set for ETFs to gain approval in 2018”. He also added that “In fact, the Cboe filed for 6 cryptocurrency ETFs at the end of 2017 which go live in 2018. This would dramatically increase how institutional investors can get exposure”.
Expect More Regulations and More Bitcoin Price Drop
This has been a trend. Over the last months, regulators have taken necessary steps in order to regulate the use of Bitcoin and other cryptocurrencies. In fact, SEC has been vocal regarding the risks of cryptocurrencies. The commission also suspended trading in some businesses mainly because of token-related announcements.
According to Canaccord’s Graham, “One of the things we’ll see is enforcement here from regulators”. And these regulations will certainly make Bitcoin drop in value.
A great example of this is China’s move to ban cryptocurrency exchanges in the country. Right after China’s move to regulate cryptocurrencies in September, Bitcoin fell by more than $2,000.
Expect More Volatility
Volatility is the name of the game. And in fact, it doesn’t instill fear among investors. Instead, it even attracts more people to risk their money for a quick profit. We’ve seen cryptocurrencies to jump by 100% in value without any update whatsoever on their software. And for the coming months, expect nothing less especially from altcoins. You can expect more people to speculate and this will cause more price disruptions.
Bitcoin Is Here to Prevail
Ethereum is on the rise as well as Ripple. Could it be a reality that these altcoins will someday take the lead from Bitcoin? According to analysts, this is less likely going to happen. Lex Sokolin, Autonomous’ global director of fintech strategy, mentioned that “Bitcoin has such magnificent network effects that I don’t see another altcoin that’s a little better at payments”. He also added that one of the top 10 altcoins is bound to collapse for the coming year.
Though these are just intelligent guesses by industry experts, it is important to take a closer look at where they are coming from. They’ve based their conclusions based on what they have observed in the industry over the years. But of course, keep in mind that cryptocurrencies remain a volatile investment, and no one exactly knows if we are dealing with a bubble or not.