2018 Could Be Big for Bitcoin
For almost a decade, Bitcoin has been the most important of all cryptocurrencies. Its price has soared as well as its popularity since inception in 2009 as a store of value and an investment tool. It is also being seen as a secure payment method using its underlying blockchain technology.
Many early adopters and investors have gained from Bitcoin. However, with several developments in view, more gains would likely come in 2018. The developments will impact positively on Bitcoin’s price, its adoption and technical expansion.
Countries embracing Bitcoin
It starts with more countries embracing the digital currency. Russia at one point considered banning cryptocurrencies. The country is now reconsidering its position after a year with the creation of a national cryptocurrency — the cryptoruble. It aims to ensure more financial transparency and allow sound regulations for bitcoin and other markets by 2018. Russia’s change of tone comes after its ally, Iran, decided to stop its dependence on the US dollar. There are suggestions that Iran is eyeing Bitcoin too.
Aside Russia, Japan has recognized bitcoin as a legal payment method. The country’s cryptocurrency exchanges now register with the local regulatory authority. Japan has also removed consumption taxes on bitcoin sales. It is not surprising that nearly 88% of Japanese surveyed are now familiar with bitcoin. Switzerland has welcomed several crypto-related initiatives. The head of Swiss National Bank recently hinted at Bitcoin being more of an investment than a currency.
Bitcoin Goes Institutional
The importance of Bitcoin’s underlying blockchain peer-to-peer (P2P) decentralized network is also growing. More companies have adopted blockchain technology’s functionalities for a few reasons. It is safer and harder to hack than the single server model used by e-commerce sites like Amazon. Its powerful consensus algorithm cuts overhead for most businesses. These accompanying incentives encourage users to participate in healthy platforms.
Banks such as Barclays and the Royal Bank of Canada have adopted the technology in their business models. RBC developed a blockchain-based solution to facilitate payments between US and Canadian banks. Barclays stepped up its efforts to bring Bitcoin into the mainstream too. It has been discussing with regulators to get bitcoin deployed in institutional settings. A positive response will investment with bitcoin streamlined.
Several new projects are springing up in China, Singapore, Slovenia, Lithuania, Ukraine and some parts of Africa. In the US, some Wall Street firms are also gearing up too. They want to offer retail and institutional investors cryptocurrency trading opportunities. One of them is the Chicago Mercantile Exchange (CME) Group that will introduce regulated cryptocurrency derivates contracts by December.
Institutional investors – as well as individuals – will also likely witness the next big leap with blockchain technology. The Lightning Network is the Bitcoin Core developers’ answer to the block size debate which aims at ensuring wider usage. LN will execute high volume transactions that are impossible on blockchains today. It works across different blockchains and reduces cryptocurrency exchange fees. LN will improve Bitcoin’s fungibility as it makes micropayments easier and cheaper to transact.
Bitcoin’s Value in 2018
Analysts and investors are excited to speculate daily on how high they think bitcoin’s price could soar. A few predict a $10,000 reach before end of 2017. The belief is that Bitcoin will extend its successful ride in 2017 into 2018. The excitement over anticipated milestones in 2018 is driving new investors into the cryptospace.
Mati Greenspan, Senior Analyst at the social trading platform eToro, shared his point of view:
“The massive surges that we’ve seen so far in 2017 are largely due to a massive influx of new users. Awareness, as well as adoption, are spreading like wildfire. But we still haven’t even scratched the surface of this market’s full potential. Perhaps, someday, Bitcoin will be even more widely used than government-backed currencies. The more people start thinking like this, the faster it can happen.”