3 Cryptocurrency Predictions

3 Cryptocurrency Predictions

Technology is causing major changes in the financial sector, especially in the area of cryptocurrency. This is a virtual currency that has been in the news a lot, especially Bitcoin, which saw a major surge in share value throughout 2017. Bitcoin is just one cryptocurrency that had a breakout year, as there are hundreds more that people can invest in. But the question is, how a currency that you can’t physically hold can gain value? It’s less about the absence of physical currency and more about the blockchain technology used to log monetary transactions that businesses complete.

The technology is complex, so many cryptocurrency investors may not have an understanding of it. What they do understand is that cryptocurrency offers a valuable and lucrative investment opportunity.

To know if this is the right investment opportunity for you, it is best to look at the top three predictions for cryptocurrency.

Prediction 1: Bitcoin Will See Exponential Growth

Recently, Bitcoin lost some value, but that’s part of the growing pains experienced by new investment opportunities. Because of these “pains,” the prediction that Bitcoin will see exponential growth may seem like more hype than fact. It’s true that the beginnings were rough and hard times have been seen, but Bitcoin bounces back every time. Cryptocurrency is still new in the world, but it is encouraging to know that the transaction volume in 2017 increased 100 times between January and December.

The predicted growth lies in the fact that there are still many institutional managers waiting to see the path blockchain technology takes. They are waiting for the perfect moment to take that important step. Financial experts say that Bitcoin shares will hit $40,000 in the next year or so.

What investors can count on is that there will be a lot of volatility and that will make the ride an exciting one. When it comes to Bitcoin, it’s very possible that it will continue to be the top cryptocurrency and that it will split into more spinoff currencies. On Aug. 1, 2017,  Bitcoin split into Bitcoin Cash.

Bitcoin Cash gave another investment option to cryptocurrency investors. At the time of the split, Bitcoin was trading at $16,000 per share. Immediately, Bitcoin cash was trading for $2,600 per share. This made it possible for investors wanting to own a piece of Bitcoin to do so without paying $16,000 for a single share. If Bitcoin splits again, the door will open to another investment opportunity, but the volatility will still be there. Regulatory actions against China has caused recent drops in Bitcoin value.

Prediction 2: The Commodity Markets Will Be Disrupted

Advancements in Blockchain technology will make it easier for marketplaces to develop more electronic services. This can result in more digital commodities making their debuts on the market. Growth may lead to more data miners being hired to aid in the securing of specific crypto coins. Data miners are usually paid rewards for their work. These rewards are called “block rewards.”

As for the protocols data miners could use or which may be more prominent, it isn’t known. Whatever the winner may be in the end, it can bring more doubters on board, so the market will be more whole.

Prediction 3: Cryptocurrency Will become More Disruptive

As institutions learn more about cryptocurrency, more are turning toward it. Exposure to the concept is increasing as time goes on. It’s easy for word to get out with media coverage and the fact that more derivative products are in the planning stages after Bitcoin futures launched in December 2017. The beginning of 2019 could see the regulatory approval of a Bitcoin exchange-traded fund.

As of now, the U.S. Securities and Exchange Commission has been rather silent about the CBOE’s cryptocurrency ETF filing in late 2017. If everything goes smoothly, the ETFs could be live in 2018, which would increase institutional investor involvement.

Is Cryptocurrency a Good Investment?

Volatility is always an issue, but the question is whether it is wise to invest in cryptocurrency since it does seem to have a promising future. There are also many cryptocurrencies to invest in, so it would seem to make sense.

To determine if investing in cryptocurrency is right for you, here are some facts for you to review:

  • Cryptocurrency is so volatile that the share price can fluctuate thousands of dollars in a single day.
  • Cryptocurrency hasn’t been around long, which means there is a lot of optimism among very excited investors, which can temporarily drive up the price.
  • Bitcoin doesn’t seem to be going anywhere, but it may not be the only winner in the cryptocurrency game as others continue to climb in value and popularity.
  • Cryptocurrency might be a part of the internet bubble that some say will eventually pop, but it is trending toward being a significant exchange on the market.
  • You may not want to invest in cryptocurrency if you don’t like risk.
  • Chinese, Russian, and U.S. regulators have a heavy influence on cryptocurrency. The regulations may not destroy it, but they can heavily influence it.
  • A lot of money can be made if you buy and sell right. You can go through Coinbase or buy GBTC to start the process, but keep in mind that these gateways have a cost. It’s possible to use an online open exchange, but the complexity is higher in exchange for lower fees.
  • If too many coins are released on the market within a short period of time, the market could be flooded with low-quality coins. This can create an obstacle for investors. It is tempting to invest in a brand-new coin in hopes it will explode in value like Bitcoin, but it’s best to research the coin before sinking money into it.
  • The decentralization of cryptocurrency means that the banking system can’t influence it.
  • The price per share can drop if investors hear bad news. This can trigger sell-offs, but the prices have the potential to bounce back quickly.

It’s OK if you’re not certain about cryptocurrency investing. You can take your time and see how the market behaves before you enter the arena. While this is an exciting opportunity, it’s one that you should feel confident about. You don’t have to be wealthy or invest in Bitcoin to see returns, but you need to be vigilant.

Some of the other coins you can consider include Ethereum, Litecoin, Monero, Ripple, Zcash, and Dash. To get started investing in any of these, you can use money that you already have or use income that you can afford to let go of. Some people see a personal loan as an option that will help them make their first cryptocurrency investment. However, the recommendation is that a personal loan is not a wise way to make an investment because investments can lose money. The loans used to fund those investments still have to be repaid. Loans work better for refinancing old debt, buying vehicles, making home improvements, and dream vacations.

Just make sure you do your research and evaluate how the market is performing before you spend the money. There is enough information on the internet to tell you when it is and isn’t a good time to buy or sell. There’s a lot of long-term and short-term potential, so it will be exciting to see where the cryptocurrency market goes from here.

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