2018 brings a fresh start for those planning to invest on cryptocurrencies such as Bitcoin. Cryptocurrency craze has definitely captured the attention of experts and newbie investors in 2017. And even though Bitcoin jumped by as much as 1,400% in 2017, there are also low points that you should also consider. In fact, Bitcoin hasn’t come close to its highest value a few weeks ago.
If you are serious about investing in Bitcoin, it is a good idea to take a closer look at two important things that we have learned so far about digital currencies. These lessons could help educate potential investors helping them in their decisions in the coming weeks or months.
The Role of Asian Market
One of the major lessons that we have learned is that the Asian market plays a major role in Bitcoin’s price. If you will look at Bitcoinity.org, Bitfiniex, and Okcoin, these websites account for a great chunk of Bitcoin trading volume. And also, these websites are based in both Taipei and in China.
Asian market can determine the trend and the price of cryptocurrencies. Bithumb, a cryptocurrency exchange site based in South Korea has steadily increased its trading volumes and even achieved the largest trading volumes for Ethereum and Ripple. Aside from Bitcoin’s price, the Asian market is also responsible for the spike in the price of altcoins.
Aside from being a factor that can increase or decrease the price of Bitcoin, the Asian market can also be considered as a predictor of the day’s price movements. Ripple’s price at Bithumb created a domino effect which made Ripple the second largest cryptocurrency to date.
Regulations Can Affect Cryptocurrency Prices
Let’s admit that there is no stable currency that can rise or devaluate by as much as 2,000% in a year. For Bitcoin, it was able to jump from around $1000 to almost $20,000 in just 12 months. On the other hand, you have Ripple that made a jump of as much as 30% in just one day.
Given these problems, it isn’t surprising why governments are willing to make the necessary regulations. China has banned cryptocurrency exchanges in the country. Japan, despite being welcoming to Bitcoin and other cryptocurrencies, has its share of experts that are worried about the wild swings brought by Bitcoin. South Korea also made its move towards regulating exchanges.
Fraud and tax evasion are also serious matters that governments have to deal with when it comes to cryptocurrencies. And because of this, it has created a good number of regulations right before the end of 2017.
And for 2018, we can expect clearer guidelines that could even affect the price of Bitcoin and other cryptocurrencies in the market.
Should You Invest in Bitcoin and Other Cryptocurrencies for 2018?
Is Bitcoin really the next generation gold that we are all waiting for? Jeff Currie who is the global head of commodities research at Goldman Sachs mentioned that Bitcoin is “not much different than gold”. With its limited number and mining difficulty, many experts look at Bitcoin the same way.
But of course, it is always safe to be skeptical towards the things that you read and hear about cryptocurrencies. Keep in mind that there could still be a bubble waiting to happen. In fact, it can be the third largest asset bubble next to both dot com and the housing bubble.