- The work on scaling problems
Bitcoin (BTC) is the most important cryptocurrency. Most government-sponsored money going in and out of the crypt world is handled by Bitcoin. So what happens with this cryptocurrency affects the entire market investing in cryptocurrency.
BTC is still dominant. It has the largest user base and the largest industry reach. Nevertheless, it faces a difficult challenge: scalability.
Bitcoin currently can not perform more than six or seven (with the “Segregated Witness” protocol upgrade, there are 12 to 14) transactions per second. Compared to credit cards that can withstand thousands of transactions per second, the criticism of Bitcoin’s ability to be useful on a larger scale is understandable.
The scalability challenge also leads to high fees.
What could a solution look like? Blockstream’s Lightning Network enables transactions that reduce transaction costs to almost zero and increase speed and scalability almost indefinitely. Scalability and lack of liquidity. That could be a major reason why Bitcoin will swell this year.
Exciting projects like these could cause a significant increase in Bitcoin.
- Large-scale and more legitimate ICOs
Like last year, ICOs will influence the ethereum network. Generally, ICOs require a lot of ether. That will strengthen the demand for Ethereum. Legitimate ICOs will lead to greater interest in Ether, as we already see in the multi-billion dollar ICO of messaging app provider Telegram and Kodak. The price of the cryptocurrency could potentially double to $ 2,000.
Many believe that regulation is hurting the markets, but that’s a very shortsighted perspective. In the long run, companies need rules to ensure legal stability and security. Regulation gives users and institutional clients the confidence to invest.
When Japan started to regulate Bitcoin, the market initially fell, but eventually it rose again. The same thing happens with Australia. Other countries may follow the same set of rules and chances are high that the fate of the market will be similar to what happened in Japan and Australia.
- More ease of use
Some startups offer debit cards to help people spend their crypto currency stocks. This means that the number of users and dealers in 2018 will increase sharply.
This would improve the reputation of cryptocurrencies and more and more companies would trust them. The companies that perform well this year will stand out and establish themselves. Some companies will thrive and others will fail.
- Institutional investors enter the market
The final reason why 2018 will be the best year for cryptocurrencies is that it will be the first year that solid institutional money flows into the ecosystem.
It is estimated that $ 10 billion to $ 12 billion has gone into the crypto-ecosystem, but that’s nothing compared to what institutional funds could invest. 10 to 12 billion dollars have brought the market to about 500 billion dollars. And that’s peanuts for today’s funds.
Conclusion: 2018, the best year for cryptocurrencies?
In summary it can be stated that no guarantee can be given for the occurrence of all 5 factors. Combining these factors could increase the upside potential of the market to seven to eight times the current level. That could award the title “the best year for cryptocurrencies” in 2018. In addition, growth is no longer based so much on hype or hope, but on solid foundations.