In the second half of 2017, the average person would be hard pressed to read a magazine or site without seeing mention of Bitcoin or cryptocurrency. The public was introduced to a whole new type of technology, known as blockchain, which some claim will have a transformative effect on everything from corporate logistics and personal identity to the real estate and pharmaceutical industries due to its secure and immutable structure. So what does 2018 hold for the future of Bitcoin and other cryptocurrencies? Here are some predictions for the year:
Immense Popularity Continues
Despite Bitcoin’s price drop from a record $19,500 per coin at the beginning of the year, its current value still offers the allure of massive returns with cryptocurrencies. Economic analysts predict Bitcoin could easily reach $100,000 this year, and other popular digital currencies, like Ethereum and Ripple, also continue to uptrend. There are now more users of Coinbase (the most popular digital wallet for select cryptocurrencies) then there are Charles Schwab traditional brokerage accounts.
Bitcoin is becoming a household name. Although the broader public might not understand cryptocurrencies, they see stories about crypto billionaires and millionaires and want a piece of the action. Interest in blockchain technology, its many uses, and cryptocurrencies will only continue to grow in 2018 as big brands also look at ways they can profit from the Bitcoin boom. Kodak, for example, recently announced it will be launching its own cryptocurrency, KODAKCoin, which will allow photographers to take part in a new economy, receive payment for licensing their work immediately upon sale, and sell their work confidently on their secure blockchain platform, KODAKOne.
Prices Keep Rising
The attraction for individual and bigger investors alike is simple. They see much larger returns in cryptocurrencies compared to any other asset class. Barring a large-scale war or other significant political or financial unrest, we’ll likely see a tripling or more in the price of Bitcoin. And Ether can very easily top $10,000, as people understand its capabilities as an application platform and a way to deploy and execute smart contracts, which perform credible and traceable transactions, cutting out the need for third parties.
Bitcoin is already entering the public consciousness, and 2018 will be the year when even grandma and grandpa will start looking into digital currency. Once it hits “Main Street,” the floodgates will open. The massive numbers of people buying the various cryptocurrencies on the market will drive the price further upward and decrease the chances of a burst bubble.
Social Media Keeps The Bubble Burst At Bay
In the last 100 years, we’ve never gone more than 120 months without a recession. We’re entering into 104 months of economic expansion, a record that the current administration wants to desperately keep rolling for the foreseeable future. There’s now bubble plasticity, which is a situation where it’s understood that multiple asset classes, including cryptocurrencies, are in a bubble state, but there’s other forces keeping a crash at bay. Social media interactions are one major reason we’re seeing such resiliency, because people from around the globe assuage each other’s fears about the state of markets the world.
A Flood of Crypto-Millionaires
The meteoric prices of Bitcoin and Ether have created many cryptocurrency millionaires, even those that only began investing in 2016 or early 2017. In 2018, we’ll see teenagers who have joined this millionaire’s club, and they’ll trumpet their success on Instagram and Snapchat. These “celebrities” will bring onboard even more investors and attention to the potential financial gains that can come through buy-and-hold cryptocurrency investing.
The Winklevoss twins are two of the most prominent Bitcoin billionaires, but many think there are other crypto-billionaires out there, with more coming in 2018. Data shows at least 100 individuals or groups are holding accounts with more than $100,000,000 in Bitcoin.
2018 is certainly going to be an exciting time as both individual investors and large financial institutions are starting to look closer at cryptocurrencies and blockchain technology. Investors with a strong stomach for price fluctuations and risk might very well make 2018 a profitable and unforgettable year.
ICOs Become The New IPO
Companies are avoiding the traditional initial public offering (IPO) and instead engaging in initial coin offerings (ICOs) that allow them to raise millions of dollars in a matter of hours. An ICO involves a company presenting its own cryptocurrency to investors in exchange for fiat currency or another established cryptocurrency, like Bitcoin. This funding method can be extraordinarily fast – one company called SingularityNet raised $36 million in just 60 seconds, a new record.
While the Securities and Exchange Commission’s guidance on the topic has been slow-going, the general sense for 2018 is one of optimism, as the agency has been vocal about making investor protection a priority.
Recently, the SEC offered legal ways in which companies can utilize an ICO as a fundraising method, and weed out scams in the space, a signal that impending regulations could favor a shift from the traditional offering model.
Additional Investing Options Sprout
While Bitcoin, Ether and Litecoin will remain the main players, there will be several new cryptocurrency launches in 2018. The financial industry firms will get into the mix with cryptocurrency exchange-traded funds (ETFs), which function as stocks and are perceived as a more easily understood vehicle for the investing public. CBOE and CME Group recently launched a Bitcoin futures market, and there will be more of this type of investing that is tied to Bitcoin’s price movements. Savvy investors are also looking at blockchain-related investing options outside of cryptocurrencies, such as the way the technology can power electricity grids, transforming operations for the $2 trillion energy market.
A Wacky Year in Mainstream Pop Culture
Cryptocurrencies will continue to be immensely popular in 2018. People will wear clothing emblazoned with the logos of their favorite cryptocurrencies, and it will seem like every other conversation is about blockchain or crypto. By Christmas, there will be children asking Santa for digital currency.
Japan is already ahead of the curve – a new cryptocurrency-themed pop group, The Virtual Currency Girls, are on a quest to educate the world through song and dance. All eight members of the group dress up as their own favorite crypto, complete with masks and logos, including, of course, Bitcoin and Ripple.
Think this is crazy? It’s only the tip of the ice berg. It will be a wild 2018. Just wait and see.