Until relatively recently, a limited number of people knew about cryptocurrency, and those who heard about it somewhere thought that it was something exotic and incomprehensible. But today, few people have not heard of the world's first cryptocurrency - bitcoin, even if its other "comrades" are not so popular.
If you remember history, the first Bitcoin transactions were carried out back in 2009. At the same time, there was simply no place to spend this coin, because the world was not ready to use digital money. This formed a frivolous attitude towards the coin, and many miners who, for the sake of interest, mined cryptocurrency, simply lost interest in it, and then access. Indeed, at that time, no one even foresaw what the future awaited bitcoin in 2018, therefore they did not think about the accumulation of this cryptocurrency.
In the beginning, getting bitcoins was very simple - it was enough to use a regular home computer with special software. The mining process is called mining and it works for many other cryptocurrencies. But in our time, it is almost impossible to mine bitcoins through a computer.
When the circle of users gradually began to expand, the popularity of the coin increased, and at the same time its price. In particular, 2017 was a turning point for the bitcoin rate. This year, the coin has grown from $ 700 to nearly $ 20,000 at its best. But despite the fact that the rate then fell to 15 thousand dollars, such jumps showed that bitcoin can become unimaginably expensive, and it has become an incredibly popular asset for investment.
It is rather difficult to predict how much bitcoins will cost in 2018, since last year, when experts were cautious about the rate of 2-3 thousand dollars, the current prices are unimaginably higher. We see the result ourselves - the forecasts do not correspond to reality by half, although for some time bitcoins were indeed quoted at the specified price. But considering the current market situation, investing in bitcoin is a pretty reasonable decision. Let's try to explain why.
Is Bitcoin amenable to any predictions
The bitcoin rate at the beginning of 2018 shows that it is very difficult to predict rate fluctuations and the further development paradigm of the coin. It’s even almost impossible, including for experts who for many years do nothing but conduct analytical research on bitcoin. But this does not mean that one cannot make an assumption about what to expect from the cryptocurrency in question.
To find out what will happen to the coin rate in 2018, experts take indicators from previous years and look for parallels. For example, they look for how many rate jumps occurred in 2016 and 2017. And if necessary, then even more ancient data, you can take the information for 2015 as a basis.
But that would be too simple, especially since bitcoin is a rather unstable financial unit due to the fact that coins are not backed up by a physical equivalent. The money is exclusively virtual, because the course can be affected by such a huge number of nuances that it is simply not possible to follow everyone.
But taking the indicators of past years as a basis, one can trace the paradigm of the rise in cryptocurrency prices, how often this happens and how much higher the amplitude of fluctuations. But even professional analysts can be wrong. In particular, in 2016, very few analysts predicted such a large rise in the price of the world's first digital coin. Let's take a look at what the leading experts suggested to us to wait in 2017:
As you can see, out of eight predictions, only one relatively correctly indicated the cryptocurrency rate by the end of 2017. All others were very cautious, choosing forecasts that were as close as possible to the current rate. Therefore, it is very difficult to find out what to expect from Bitcoin in 2018. In addition, one should not unconditionally believe those predictions that already exist, because they may be wrong.
You need to understand that, despite the decentralization of the Bitcoin system, many side factors affect the exchange rate that cannot be taken into account, even if the forecast is made by the best professional:
In addition, the presence of competitors and the attitude towards them in the market also affects the accuracy of the future forecast for 2018. But even if one of them gets a higher capitalization, it is almost impossible to bypass bitcoin at this stage of the development of the cryptocurrency market. So, even if there are forecasts on this topic and they are fully justified, this will not guarantee their truthfulness in the event of unexpected situations. Therefore, everyone can be expected.
Major growth catalysts
2017 may well be called the year of the cryptocurrency or even the year of bitcoin, because the rate of this coin has risen almost exponentially. Such a rapid growth had to wait for several years, and last year it just happened. Considering all this, users are confident that buying bitcoins in 2018 is a mandatory task for all investors who want to earn as much as possible on the growth of the rate. But given that bitcoins are suitable for a long-term investment, it is important to know the main factors that can positively affect the growth of a crypto coin in 2018, which has just begun:
- The first factor is the huge potential of blockchain technology... The most logical and tangible reason for the growth of the coin rate that can be traced over the past few years is the incredibly high potential of blockchain technology. This is what initially hooked users who mined tokens. Who does not know, a blockchain is a digital decentralized ledger, where you can register transactions without using the services of an intermediary, which is a bank. This network uses open source, which makes it almost impossible to change the information provided there. In addition, the bitcoin blockchain provides maximum security, which opens up great prospects for the platform in question as a full-fledged, inherently unique payment system.
Bitcoin blockchain updates... Investors pay attention not only to the reliability of the cryptocurrency, but also to how many updates this system has gone through. Each of them periodically raised the bitcoin rate, because such a phenomenon guarantees the increased prospects of the cryptocurrency. The fact is that the update made it possible to increase the number of transactions that the system conducts per second. This has become the main problem of bitcoin, keeping its more rapid growth. The developers have fixed this, albeit not completely. But even such changes allowed the system to become much more popular and significantly raise its price.- Depreciation of the dollar... Since Bitcoin was created as an alternative to something as powerful as the dollar, its fluctuations affect the price of the coin. Usually, when the dollar falls, investors try to protect their money by investing in gold, which before the advent of cryptocurrencies was considered the most reliable way to preserve their assets. In principle, this is true, but now with the advent of Bitcoin, there are much more alternatives. Bitcoin is called digital gold, so the most daring investors chose it to support their own capital and did not lose. Thanks to the popularization of bitcoin and its use as a safe haven, it was possible to take this cryptocurrency to a completely different level.
Interest from institutional investors... Due to the fact that not only individual investors but also institutional investors, including Fidelity and Goldman Sachs (NYSE: GS), are showing interest in bitcoin, the coin rate could not remain at the same level. Many companies that entered this stream on time can now earn decent money by mining bitcoins. For some it is just a good addition to profit, and for others it is the main source of profit. In addition, given the growing liquidity of the cryptocurrency market, many firms are successfully experimenting with bitcoin trading. Even a company like Goldman has decided to go into cryptocurrencies, and despite the seeming absurdity of this decision, it is not something out of the ordinary. In general, there are more and more investors who are ready to work with cryptocurrency, which ensures the stability of the coin.- Bitcoin has high potential as a means of payment... It was created as an alternative to fiat money, which allows ensuring the safety, efficiency, and availability of money transfers. So the frequency of using bitcoin as a means of payment makes this coin even more expensive. After updating bitcoin, several companies indicated that they were ready to accept it as a means of payment. Although this applies to large organizations, and smaller firms are only preparing to take a risky step for themselves. If in 2018 a couple more companies open a bitcoin account, then it is possible to expect another jump in the rate.
Removal of restrictions on the use of bitcoins in China... It is the Chinese cryptocurrency exchanges that today occupy the first places in popularity among people working with bitcoins. But this turned out to be a short-lived phenomenon, because the news that China could change its approach to the use of cryptocurrency and thereby open up wide horizons for financial transactions turned out to be fiction. Banning ICOs and restricting all existing cryptocurrencies on a huge number of Chinese exchanges could have contributed to the crash. This raised the number of bitcoin transactions that users were in a hurry to do before the close of exchanges, and contributed to the growth of this cryptocurrency.- Another factor contributing to the growth of bitcoin is the unwillingness to miss out on profit... Emotionality of investors plays in favor of the bitcoin rate (of course, not always, but quite often). Many users, seeing that the rate is rising, buy coins without thinking about why they are doing it, how they will store these bitcoins and whether they have chosen the right moment to complete a financial transaction. But the general trend for the growth of the cryptocurrency does not always indicate that it will continue to grow in the future, although it is precisely such actions that contribute to the growth of the cryptocurrency.
- Getting bitcoin brand status... People are known for their unaccountable trust in everything known. Today everyone has heard about bitcoin, because they want to own this coin.
The ultimate success of blockchain technology at the state level and increased confidence in the coin. Bitcoin's growth forecast for 2018 is pretty positive, right up to full acceptance of the system. Several countries have already successfully officially recognized the coin, including Japan. Each such decision on the part of a country fixes bitcoin in the currency market, and not only digital money.
But given the positive factors that contribute to the growth of the coin, one should not forget about the high competition in this industry. Bitcoin, although the first cryptocurrency, is far from the only one. Many of the new products are more sophisticated, functional and affordable, albeit not so expensive yet. So it is quite possible that over time (not in 2018) bitcoin will be replaced.
What slows down the rise in the price of Bitcoin
Bitcoin's prospects in 2018 are also negatively impacted. In particular, the following criteria can be identified that can slow down the rapid growth of such a promising cryptocurrency as bitcoin. In particular, this concerns the fact that bitcoin, like other cryptocurrencies, has an illegal status in many countries. This is precisely what prevents bitcoin from accelerating to unprecedented sizes. Of course, today the position of bitcoin is considered in many countries, but it received official recognition only in South Africa. So ignoring the currency at the official level clearly does not add to its popularity.
In addition, there are other factors that hinder the growth of Bitcoin:
So, despite the fact that bitcoin is one of the most liquid cryptocurrencies, in 2018 its value will change more than once. But factors that restrain the price of bitcoin cannot be avoided. It may even be that without them the price of the coin could not have become so high in 2017-18. Investors would be more wary of the coin, which means there was less demand for it, which would make Bitcoin cheaper.
Will there be growth in 2018
The past 2017 was a very busy year for bitcoin, because this cryptocurrency managed to rise from $ 778 in January 2017 to almost a stunning $ 18 thousand per coin. Will Bitcoin grow at the same rate in 2018? Of course, cryptocurrency will be the main topic of conversation, but will money continue to grow? Summarizing the main considerations of experts on this topic in 2018, we can highlight several main facts:
Now let's see how much bitcoin will cost on the exchange by the end of the month. Although there is always a risk that this forecast will not live up to expectations.
|
Day of week |
Forecast, $ |
||
|
Direction at the end of the day |
Course at the beginning of the day from 07.00 - 14.00 hours |
End of day course from 14.00 - 21.00 hours |
|
| January 10, Wednesday | ▲ will rise | 13611,3 | 14071,11 +459,81 |
| January 11, Thursday | ▼ will decrease | 14071,11 | 12965,4 –1105,71 |
| January 12, Friday | ▼ will decrease | 12465,4 | 12115,4 –350 |
| January 13, Saturday | ▼ will decrease | 13115,4 | 12036,82 –1078,57 |
| January 14, Sunday | ▼ will decrease | 11036,82 | 10751,11 –285,71 |
| January 15, Monday | ▼ will decrease | 10751,11 | 10672,54 –78,57 |
| January 16, Tuesday | ▼ will decrease | 10672,54 | 10465,4 –207,14 |
| January 17, Wednesday | ▼ will decrease | 10465,4 | 10151,11 –314,29 |
| January 18, Thursday | ▼ will decrease | 10151,11 | 10108,25 –42,86 |
| January 19, Friday | ▲ will rise | 9608,25 | 9822,54 +214,29 |
| January 20, Saturday | ▲ will rise | 9822,54 | 9965,4 +142,86 |
| January 21, Sunday | ▲ will rise | 9965,4 | 10158,25 +192,86 |
| January 22, Monday | ▲ will rise | 10158,25 | 10251,11 +92,86 |
| January 23, Tuesday | ▲ will rise | 10251,11 | 10872,54 +621,43 |
| January 24, Wednesday | ▲ will rise | 10872,54 | 11608,25 +735,71 |
| January 25, Thursday | ▲ will rise | 11608,25 | 11965,4 +357,14 |
| January 26, Friday | ▲ will rise | 11965,4 | 13329,68 +1364,29 |
| January 27, Saturday | ▲ will rise | 13329,68 | 13965,4 +635,71 |
| January 28, Sunday | ▲ will rise | 13965,4 | 14686,82 +721,43 |
| January 29, Monday | ▲ will rise | 14686,82 | 15036,82 +350 |
| January 30, Tuesday | ▼ will decrease | 15536,82 | 15086,82 –450 |
| January 31, Wednesday | ▼ will decrease | 16086,82 | 14893,97 –1192,86 |
Pessimistic forecast
Despite the fact that most experts give Bitcoin relatively positive assessments and optimistic forecasts, there is still a fly in the ointment. Some experts are sure that bitcoin in 2018 will not be the best events. Among the main pessimists is Chris Berniske. He, as the main skeptic of the crypto community, calls bitcoin nothing more than another "soap bubble". In addition, the high price of the coin is absolutely and completely unreasonable, according to this expert.
His opinion is that bitcoin quotes will drop by at least 75% this year. This will be followed by a major collapse in prices on the stock exchange. As for the reasons for such a decisive and dramatic movement of the cryptocurrency rate is that the market is overheated. That is, the excitement around cryptocurrency is too far-fetched, and there are too many offers to be satisfied with the current market situation. And all thanks to artificially created news, etc. When the market overheats, it will destroy the bubble containing the unsupported bitcoin. So the price collapse is quite expected.
In addition, the decision of many countries not to recognize or significantly restrict this cryptocurrency also indicates that the pessimistic forecast of the coin rate for 2018 is very realistic. And, of course, you can also believe in a bad forecast because the safety of using this coin is highly questionable. If the bitcoins are somehow stolen or you lose them, it will be impossible to return the assets, since there is no way to prove that you owned these coins at all. Although in the future this problem can be solved by special wallets that provide more reliable money protection.
If we take the pessimistic forecast for 2018 as a basis, then it is worth counting on a rate in the range of one thousand to two thousand dollars for one bitcoin, and according to another version from 3 to 5 thousand dollars. After such a serious collapse in prices, market capitalization will decrease by several dozen times. This will be the catalyst for the start of a serious and prolonged crisis.
conclusions
Considering all of the above, one thing can be said - the chances that the coin will continue to grow in 2018 are quite high. This indicates that buying coins is really a good idea, since by investing a certain amount of money in bitcoins now, in a few years you can become a millionaire or even a billionaire.
Most experts advise working with cryptocurrencies, making very bold predictions about the future price of coins. For example, they talk about a price not even of several thousand dollars, but of several tens and even hundreds of thousands of dollars per bitcoin, given that the BTC / USD pair is increasingly appearing at brokers and on various exchanges. This speaks of the huge potential of the cryptocurrency and its future boom.
Today bitcoins are listed on the following platforms:
| EXCHANGE | COUPLE | COURSE | VOLUME | VOLUME% |
| Bitfinex | BTC / USD | 14440 USD | 53607,160 BTC | 17.16% |
| Coincheck | BTC / JPY | 1808600 JPY | 37823.406 BTC | 12.11% |
| Okex | BTC / USDT | 14312 USDT | 30672,399 BTC | 9.82% |
| Gdax | BTC / USD | $ 14,434.99 | 20438,011 BTC | 6.54% |
| Bitstamp | BTC / USD | 14,422.23 USD | 18323,072 BTC | 5.87% |
| Binance | BTC / USDT | 14340 USDT | 17,500,183 BTC | 5.6% |
| Gemini | BTC / USD | USD 14,422.72 | 9083,390 BTC | 2.91% |
| Kraken | XBT / EUR | 11970 EUR | 7432,366 XBT | 2.38% |
| Poloniex | BTC / USDT | 14349.4026538 USDT | 7120,384 BTC | 2.28% |
| Hitbtc | BTC / USD | USD 14376.57 | 5358,710 BTC | 1.72% |
| Bittrex | BTC / USDT | 14333 USDT | 5340,796 BTC | 1.71% |
| Bitstamp | BTC / EUR | 11957.5 EUR | 5191,539 BTC | 1.66% |
| Gdax | BTC / EUR | 12197.35 EUR | 4540,269 BTC | 1.45% |
| Kraken | XBT / USD | USD 14,317.9 | 4038.620 XBT | 1.29% |
| Itbit | XBT / USD | USD 14,372.02 | 3582,568 XBT | 1.15% |
These are not all exchanges where bitcoins work, but the largest ones. The sales volumes are stable, and it is clear that the cryptocurrency is in demand. Another factor in favor of a positive development option for Bitcoin is its constantly growing market capitalization. This includes coins that have moved away from bitcoin:
Investment companies are determined to invest in bitcoin, contributing to the skyrocketing price. In addition, in many states, active discussions are underway about granting official status to cryptocurrencies. The position of bitcoin in Russia is well known. When the situation clears up, it is possible that the rise in the rate of coins against the dollar will be more rapid than against the ruble. That is why a cryptocurrency price forecast is a very subjective phenomenon. It is difficult to say exactly what will happen by the end of 2018, therefore, focus on the nearest forecasts, without making far-reaching plans if they do not relate to investments.
In the meantime, there are 2 theories:
- The first provides for a rise in prices from 50 to 500 thousand dollars.
- The second speaks of a drop in value to 2-5 thousand dollars.
Which one is true - time will tell.
2017 is called the year of bitcoin by many. And what will happen next? We interviewed experts in the field of cyber currencies and found out what awaits us in the new year: how the legislation of the Russian Federation and foreign countries will change, what difficulties miners and crypto coin owners will face, and also found out whether bitcoins will replace paper money.
What changes in the field of cryptocurrency regulation are possible in Russia and other countries in 2018?
Experts are convinced that the Russian Federation has all the prerequisites for the emergence of legislation regulating the circulation of virtual currency. Most likely, the government will introduce taxes on mining and income from operations for the sale and exchange of crypto coins. So far, the Russian leadership has postponed the decision on this issue until the first half of 2018.
The Russian Federation has all the prerequisites for the emergence of legislation regulating the circulation of virtual currency.
In drafting new legislation, Russia, like other countries, will be guided by the experience of Japan, Singapore and Switzerland, where crypto money is already in full swing. By recognizing the virtual coin, the Russian Federation will create opportunities for domestic capital, limited by sanctions, to enter the international market through cryptocurrencies.
Co-founder of the platform for the development of crypto trading Simdaq Evgeny Dubovoy believes that the regulation of cryptocurrencies at the state level will benefit the market: "The creation of a legislative framework will allow miners and crypto projects to legalize, and the state to receive taxes." At the same time, the expert notes that the action of the regulator should not introduce restrictions that will change the essence of the free circulation of cryptocurrencies.
In 2018, a large number of countries will definitely pay attention to the virtual coin at the state level. This is confirmed by an expert from DeHedge Roman Bruskov,expecting significant changes in foreign legislation: “Separate restrictive laws on circulation and participation in the cryptocurrency market can be adopted in Asian countries, from where most new projects and cryptocurrency assets originate. The US is likely to be the hardest to impose regulations to curb investors and generate revenue from the new market. ”
While there is no legal framework on the issue of cryptocurrency in Russia, many companies operating with bitcoins choose Singapore or Switzerland for their transactions. “I hope that the planned law in Russia will be quite liberal, which will allow many ICOs to be carried out already on our territory,” said the co-founder of ICOPlate Oleg Sharpaty.
Fyodor Golubev, An IT investor and owner of GorodRabot.ru, named the state as one of the main threats to the virtual coin. He believes that soon they will want to subjugate the cryptocurrency: "States can seize more than half of the resources and create centers for the identification of bitcoin wallets."
For example, in the United States, tax authorities are already asking exchanges for their user account data and information on the amounts they operate. The Chinese authorities have significantly tightened their position in relation to private virtual currencies and are considering the option of creating a "national bitcoin".
Based on the opinions of experts, we can draw the following conclusion: while the state does not have a clear strategy, but the issue of status will most likely be resolved in 2018.
Why won't cryptocurrency replace paper money in the very near future?
None will replace paper money as long as its use is associated with certain difficulties. Among them are the speed and cost of transactions, risks during operations, high commissions for depositing and withdrawing funds and complete exposure to legislation.
Dmitry Nikiforov, CEO of the QUPPY group of companies (mining and software) compared the formation of bitcoin with the emergence of payment methods already familiar to all: "Cryptocurrencies are an additional technology for making payments - like plastic cards used to be, like paper money that replaced metal." According to the expert, with a virtual coin, the world is moving to a different payment interface, and 2018 will show in what format such a transition will take place in the future.
ICObox analyst and member of the expert council at the State Duma on blockchain technologies Nikita Marine believes that neither infrastructure nor society is yet ready for the massive use of virtual coins: "Cryptocurrencies need several more years to enter the life of the average person and stop being the subject of interest only to the professional blockchain community and financiers."
However, the first steps have already been taken towards the widespread use of bitcoins. For example, the Estonian crypto bank Crypterium plays the role of an infrastructure that provides users with the ability to pay with cryptocurrency for phone payments, services, fines, loans, taxes, taxis, the Internet and other services.
Mine, Shura, mine, bitcoin is gold! The main problem in everyday use is the duration of transactions and the jumping rate: during the implementation of one operation, the cost of crypto money can change several times.
Based on these data, we can safely say that in the near future, no virtual currency will be able to completely replace paper money.
What is the difficulty of converting crypto money into ordinary (cashing out), and what changes await us in this direction?
On the issue of withdrawing cryptocurrency from the virtual world, the opinions of experts were divided: some believe that there is nothing difficult in this, while others think completely differently.
For instance, Sergey Mushtuk, the internet marketer of the Media Targeting advertising agency sees the complexity in the number of operations for exchanging cryptocurrencies: “If you trade altcoins on an exchange, you need to transfer altcoins to bitcoin, withdraw them from the exchange to another service and sell them for non-cash money, which will be credited to your bank to card ".
And here Alexander Kitchenko, an expert of the RLN Today media project, believes that the withdrawal of cryptocoins is not the most difficult task: "There are many channels on how to do this, from selling cryptocurrency for cash to those individuals who do not yet have it, to specialized online exchangers."
Until the status of the virtual currency is officially determined, the process of cashing it out is illegal.
However, most experts point out that cryptocurrency exchange is not so much difficult as it is risky. Until the status of the virtual currency is officially determined, the process of cashing it out is illegal. Until this market segment is regulated, the participants in the turnover are not immune from fraudsters: there have already been cases when buyers took both money and cryptocurrency, leaving the unlucky miner with their noses.
What risks in the next year should those who mine and store cryptocurrency need to consider?
On this issue, the opinions of experts agreed: the main risks in 2018 will be security and the possible tightening of state regulation of cryptocurrencies. Against the background of the fact that 2017 brought significant profits, some experts expect a period of decline. High cryptocurrency prices can quickly turn to low ones, and those who have directly invested in virtual money risk serious problems and lose their assets.
The main risks in 2018 will be security and a possible tightening of state regulation of cryptocurrencies.
Vasily Trofimchuk, the co-founder of the BitClave service, called the outgoing year the "Year of Bitcoin" and compared the cryptocurrency market with a big one: "It is possible that the cryptocurrency bubble will burst significantly, followed by its inflation back in a few weeks / months."
Most likely, along with the new laws, there will be new taxes on transactions with virtual currency. Co-founder of the HOQU project Alexander Duzhnikov sees this as a risk for those who are already accustomed to illegal ways of using their funds: “Unfortunately, it is not customary in our society to pay taxes. As a result, many miners or just people with funds on a crypto wallet will try in every possible way to hide their savings. Which, accordingly, may be fraught with them. "
Along with the popularity of cryptocurrency, the number of scammers and speculators has also increased. In the new year, all fans of the virtual coin will need to seriously think about the safety of their funds.
Evgeny Glariantov, founder of the FREED blockchain platform, advises cryptocurrency lovers to beware of speculators and be on the lookout: “Anyone today can participate in this gold rush. But to get real benefits, you need to be adventurous only in combination with discretion and pragmatism. " I agree with him and Dmitry Machikhin, CEO of Midex IT: “The biggest risk is security. You should be careful about the procedures for the storage, sale and transfer of cryptocurrency assets. "
"Bubble", "pyramid", "tulip mania" and a few dozen more words are repeated over and over again by the opponents of the cryptocurrency, observing how the bitcoin rate has risen from $ 1,000 to $ 10,000 since the beginning of the year.Despite the statements of such personalities as, as a rule, do not choose words, bitcoin surprised everyone, even the most optimistic forecasters, having risen by 900% since the beginning of the year. Many traders say this is the fastest growing market they have seen in the last 40 years. Several of them shared their thoughts with CNBC.
Distilled Analytics analyst and CEO David Schrier said that he does not doubt for a second that wild speculation is taking place in the cryptocurrency market, but this does not harm the technology itself.
“Bitcoin has enough practical utility that will allow it to retain some value, even if the rate drops slightly. Amazon didn’t drop to $ 0 when the dot-com bubble burst, but other inflated stocks that had no real backing followed that path. Likewise, Bitcoin will not drop to zero, but I think the number of cryptocurrencies will decrease, ”he said.
House Williams, lead researcher for the DFINITY Project, is skeptical of Initial Coin Offering (ICO) campaigns, noting that only a fraction of them have a chance of success.
“The vast majority of them were created with the sole purpose of raising money from enthusiastic investors, but not to develop a useful product that could be used in the real world,” says Williams.
Schrier noted that the collapse of the cryptocurrency market will not affect other products on the blockchain, in particular in the banking sector, adding: "Speculation is helping to attract new resources of venture capitalists and entrepreneurs into this space."
Speaking about bitcoin volatility, Williams explained that the cryptocurrency must remain stable in order for it to serve as a medium of exchange and be used in day to day transactions.
“Bitcoin is known as an unstable asset because its value is primarily determined by market speculation, which makes it impossible to use it as a normal currency at the moment,” added Williams.
However, he is worried about the fact that Bitcoin may turn out to be a pyramid scheme that will allow only early investors to get rich, while others will lose their money.
The CEO of the Hong Kong cryptocurrency exchange BitMEX, Arthur Hayes, in a conversation with Bloomberg, noted that people have long called bitcoin a bubble, which, however, does not in any way hinder its growth.
“They talked about a $ 1,000 bubble, a $ 5,000 bubble, and they say that a $ 10,000 bubble too. Trading short is very dangerous, especially in a brand new monetary system. This happens once every several hundred years, and then everything plunges into chaos, "- said Hayes.
Hayes gave his comment after attending the Consensus crypto conference in New York. According to his observations, most of the attendees of the event wore suits, which may indicate the rise in popularity of cryptocurrencies on Wall Street.
“The fear of missing out on an opportunity is growing every day,” he said. "The traditional asset manager or investor, banker who may have been unflattering about Bitcoin for several years now has to give away thousands of dollars to find out how to get involved in a new industry."
According to Hayes, Bitcoin could hit the $ 50,000 mark by the end of 2018.
Steven Innes, head of trade in Asia-Pacific at Oanda, fears that the situation could develop in a "falling knife" scenario.
“Are investors ready for this? Of course not, ”says Innes.
In the long term, together with the launch of Bitcoin futures on the CME Group Inc platform and other derivatives, cryptocurrencies will become a more reliable asset, Innes said. He expects that in the near future the bitcoin rate will fall by 3-6%, as investors will close some of the positions.
“When we start approaching such crazy numbers, I start to be a little afraid that individual traders enter this market, guided by the false assumption that it will continue forever,” he said.
“Look not only at the trajectory of the currency and exchange rate, but also at what influencers in governments, central banks, business think. This is where you can get information about where the market will go next, ”says Jean Chu, managing partner of Hong Kong-based cryptocurrency fund Kenetic Capital, who bought his first bitcoins at $ 1,100 in 2013.
“One of the main factors that is now fading away are the civil wars that have raged all this time,” he says, referring to the controversy over the technological update of the bitcoin code. “The situation is much calmer now. One of the parties was disarmed, and at the same time it became clear that the further growth of the ecosystem could follow the predicted path. "
Chu suggests that a correction may come to the bitcoin market in the near future, but it will not be deep, and current price levels will continue to attract new investors.
Gavin Jung, CEO of Hong Kong-based investment firm Cryptomover, believes owning a whole bitcoin today is a matter of status.
“The Veblen effect comes into effect (note - demonstrative consumption). The higher the price, the more desirable the product becomes to society, ”Jung said.
According to Lewis Fellas, head of the investment division of Bletchley Park Asset Management, the main factors behind the growth of the bitcoin rate were the CME Group's announcement of the launch of bitcoin futures and the coverage of this issue in the media.
At the same time, he is convinced that the risk of a short-term correction remains, and it can turn out to be quite deep, especially if the launch of futures does not go according to plan.
"A delay or no response can cause a 30-40% correction," Fellas said.
Leaving the sutra today, I was shocked by a question from a regular grandmother, sitting at the entrance on a bench.
It sounded like this: “Well ...? Why are there your Bitcoins today? "
I honestly didn’t know how to react, but I immediately remembered the classic story about a Wall Street shoe shiner, the moral of which is roughly as follows: it (the stock) must be immediately disposed of. "
It's the same with Bitcoin today. The topic of cryptocurrencies has penetrated so much into the masses that sometimes you wonder what characters are interested in it ... For example, Ivan from the village, whom you see once a year in the same village, a guard in the parking lot where you keep your car, or, finally, a neighbor -the amateur "sip" today is kindly interested in where to get video cards.
Just some kind of fever ... The Internet has long had its own names for this: cryptocurrency trend, crypto-boom, etc.
What underlies the value of Bitcoin?
It was not for nothing that I told you the story about the grandmother, about the cleaner and about the neighbor, because all these are clear signs of an "overheated market". It is not for nothing that Bitcoin and a number of other cryptocurrencies have increased their value tenfold in just a year.
In such a situation, it is worth asking yourself the question: is there an economic justification for such growth? Or, perhaps, this is another "tulip fever"?
As for me, the answer is obvious: the current value of bitcoin is 95% of the demand generated by "investors"... Those who see in Bitcoin exclusively earnings, and not a settlement system, or why it was invented there ... A number of Western publications that I read before writing this article are of the same opinion.
In reality, Bitcoin is not very actively used for its intended purpose. For example, ours does not accept payments in Bitcoins, because there is no demand for this direction. The people are not yet used to paying with cryptocurrency and, as before, prefer the usual payment systems.
So, we are gradually coming to the conclusion that the only driving force for the growth of the price of cryptocurrency is greedy investors.
If we compare the growth of Bitcoin with the growth of the share price of any large company, for example Facebook, then the growth of the latter is confirmed by the development of new markets, an increase in the advertising audience, the introduction of innovative features, etc.
In the case of Bitcoin, its price and, as a result, the investor's earnings are formed at the expense of money brought in by another investor, followed by another investor, and so on ... This will continue until the volume of money entering the market becomes less than volume leaving it. Doesn't look like anything ...?
No, I am not claiming that Bitcoin is a pyramid scheme, however, it is clear that it is overvalued by the market and should return to its real market value.
Given the specialization in the strategy "against the crowd", let's try to analyze market sentiment for Bitcoin.
Analysis of market sentiment for Bitcoin
The first thing to know when analyzing crowd sentiment is that every trend has a beginning and an end. And the trend itself can be conditionally divided into three phases:
- active growth;
- peak of popularity;
- extinction.
The easiest way to understand this is on the example of a spinner, which until recently was at its peak, but now it is practically forgotten.
The Google Trends service tells us that at the moment the popularity of the spinner is only 4% of its peak value. Obviously, the spinner has already passed all three stages and is now striving for oblivion. Actually played around and got tired ...
Of course, there are industries that are not subject to trends (we are talking about popularity), for example, Forex has a stable volume of demand over the past 5 years.
Bitcoin, oddly enough, in this regard is closer to Spinner than to Forex.
In 2017, there was a surge in mining first, followed by a huge demand for Bitcoin itself and other cryptocurrencies.
Let's take a look at what phase of the trend Bitcoin is currently in:
Obviously, attention to the topic of Bitcoin has declined, and with it the influx of new participants has decreased.
Meanwhile, on the market ...
The first echelon of investors, the so-called "smart money", having seen signs of a decline, began to actively take profits. But as fewer and fewer people remained willing to buy Bitcoin at an inflated price, its value began to gradually decline.
All this took place within the framework of the law on "supply and demand", and there is nothing criminal about this, so that you do not think ...
At the same time, there is still a group of participants on the market who tried to “jump on the last car”, but did not have time. We are talking about those traders who bought in the price range from $ 13,000 to $ 20,000 and, at the moment, are at a loss.
According to the laws of the market, the size of this group in monetary terms exceeds the amount of funds that have already been withdrawn from the market. Such a powder keg.
Of course, they are in no hurry to sell the cryptocurrency, expecting the price to return to at least $ 20,000, but this most likely will not happen. Moreover, most of them do not even consider the top-down scenario, since very strongly "believed" in a bright future. Therefore, in the event of a negative scenario, they will be taken by surprise and begin to massively fix their losses, trying to save at least something.
This group is the very driving force for the downward movement. The only thing that is needed for this is to provoke an "explosion".
Therefore, in trading, the concept of psychological levels is often distinguished, which denote the trigger points of panic among investors.
If we look at the Bitcoin chart, we will see a breakdown in the downward direction of one such psychological level at ~ $ 15,000 (December 21, 2017). This was the point when the smart money realized that growth was over and it was time to take profits.
At the moment (01/26/2018) the situation does not look very stable, I would say with a downward bias. At the same time, the demand for Bitcoin continues to decrease.
Let's try to predict what will happen to Bitcoin in 2018 and how much it can fall.
Bitcoin forecast for 2018
In the near future, late January-early February, we will be able to see the next wave of profit-taking among traders who “stop believing”.
The psychological mark is at the level of $ 9 thousand with the potential to fall to the price of $ 7000 for one bitcoin.
In such a scenario, the price will be fixed for some time in the range of $ 8-9 thousand.
If the media and bloggers continue to inflate the topic of the "bitcoin crash", driving up fear on investors, then another fixation may await us, but this time - only losses.
Upon reaching the third psychological mark, which is at the level of ~ $ 5,300, we will see a real panic with the potential to fall to the level of $ 2- $ 3.5 thousand for one Bitcoin.
In this case, it is difficult to speak about the timing, since the outcome depends on the combination of a number of circumstances that cannot be predicted.
The end of the downward movement will come when the trend in Bitcoin goes to its new round. And for this, first it is necessary that all those who have suffered a loss, in fact, "lick their wounds" and be ready to re-believe in growth.
If we talk about the possibility of reaching a price of $ 20,000 for one Bitcoin, then you should not count on it, at least in the next 2-3 years, as it was in the period from 2014 to 2017.
Should you buy bitcoin now?
More recently, we were aiming at $ 10,000 per Bitcoin.
Despite the fact that the previous forecast was in a very positive way, today we do not recommend buying any cryptocurrency in order to earn money.
The main reason is not in the downward potential, but in the very probable absence of an upward one ... That is, having bought Bitcoin today for the purpose of making money, you can become a hostage of the market for the next few years.
Therefore, we propose to postpone Bitcoin until the situation is clarified, and in the meantime, consider other assets for investment.
For example, now they are actively developing the topic of gold, they say it has already passed its downward phase and is ready for a new trend. At the same time, it also has a limited supply, which was often presented as an advantage of Bitcoin.
Who knows, maybe 2018 will really be the year of the golden boom ...?
Much has been said about what Bitcoin will be in 2018. Forecasts for the future of cryptocurrency are very different. Some believe that the finest hour of digital coins is still ahead, others perceive them as a utopia, and still others consider them a real threat to the global economy. Moreover, most often the authors of such predictions appeal more to emotions than to reason. Everyone expects that in 2018 Bitcoin will become either the cause of total prosperity, or vice versa - misfortune.
What awaits Bitcoin in 2018, according to Robert Schiller
Finding grains of truth in all this expert bacchanalia can be extremely difficult. Therefore, the opinions of people like Robert Schiller are especially valuable, and help to look more soberly at what is happening around cryptocurrencies. Well, for those who are in the subject and waiting for new financial opportunities, this is another way to adjust their investment plans for Bitcoin in 2018. And judging by what Robert Schiller predicts, many will have to rewrite their roadmaps.
Robert Schiller is an internationally renowned economist, co-author of several popular works on financial and economic literacy, and an honorary member of the Nobel Society.
Success and new heights await Bitcoin in 2018
According to the scientist, cryptocurrencies have enormous potential, as they carry an important message at their core. The traditional approach to the formation of the value of tangible assets is outdated. Bitcoin is a good attempt to reconsider, and maybe change the very concept of currency relations. Robert Schiller expects that in 2018, but also the individual economies of the world.
Apparently, Robert Schiller's expectations are more than justified. At least five countries have confirmed their intentions to integrate bitcoin and blockchain into their own economies. Among them:
- United Arab Emirates;
- Israel;
- Austria;
- Switzerland and Bahrain.
The scientist-economist expects that such steps will help the state economies to adjust their own inflationary policy, and in the future, even minimize its impact on foreign exchange reserves. Therefore, Bitcoin coins in 2018 have every chance of breaking new price records. But Schiller advises against considering cryptocurrency as a long-term investment asset.
Bitcoin will be forgotten after a successful 2018
The scientist explains his position on the collapse of the cryptocurrency in two or three years as follows:
I tend to view bitcoin as a good economic experiment. But I'm not sure that the coin is practical in everyday life, although this is what the whole progressive world is waiting for.
Due to its high investment attractiveness, people overestimate the value of bitcoin itself. It is not the coins themselves that are much more valuable, but the ideas and opportunities they open up. in 2017 was able to attract almost half a trillion dollars of investments in various projects. In 2018, the primary coin offering will see even greater success, given the interest of individual governments in the latter.
At the same time, Robert Schiller welcomed the inclusion of the Bitcoin coin on the Cboe and CME lists, and expects this positive price effect from this.
Despite the fact that this news did not bring the expected economic explosion, I see this step as positive. This could make Bitcoin more stable in 2018, which is what the entire progressive world is waiting for.
At the same time, Robert Shiller admits that making short-term predictions about Bitcoin and what awaits him in a week or a month is difficult.
What awaits bitcoin in 2018 according to stock charts
Now Bitcoin is pursuing a positive trend, since according to statistics, each short pool changes with a succession of long ones. This in itself is a remarkable trend worth considering.