2017 Record Crypto Year

2017 will forever be remembered in the minds of many as the “year of the cryptocurrencies.” This statement reflects the crypto-industry’s exponential growth as market caps, investor participation, and media coverage for the sector grew immensely. For instance, in 2017, the cryptocurrency industry saw record-breaking growth rate in both the number of market participants and in market caps. The number of cryptocurrency assets on exchanges grew by 216% from around 617 to 1,335. Simultaneously, the total market cap increased by 3,363% with Bitcoin’s market cap jumping 1,364% alone, and the altcoin’s market cap jumping by 16,695%. Moreover, over $6 billion was raised in more than 382 ICOs throughout 2017 with June and December recording the highest numbers.

2018 Crypto Bear Market And The Future Of Crypto

Fast forward to 2018 and the year has been all the more eventful. While most market participants predicted the surge in crypto prices to continue, the reality has been quite the opposite. Some predicted that Ethereum’s value would overtake that of Bitcoin, but Bitcoin’s dominance in the industry has only grown. Bitcoin is still the industry’s leader, and whenever its price dips, it drags the whole cryptocurrency market down. In fact, 2018 has been cryptocurrencies’ worst bear market yet, the Bubble, it would seem, has burst. Currently, the market is unable to break out of its bearish trend, and this has led to several market participants to question the future of cryptocurrencies. Will cryptocurrencies eventually replace conventional currencies and become mainstream, or are cryptocurrencies just a passing façade that will fade out soon? Let’s take a look at these possible future outcomes below.

Cryptocurrencies’ Future as a Huge Success

Cryptocurrencies are to a large extent expected to have the potential to emerge as a disruptive payment innovation. Given the fact that more governments are looking into the regulation of cryptocurrencies, investors are a bit more comfortable about investing in them. There’s the possibility that added regulation will reduce the market’s uncertainty, thereby reducing investor anxiety about the industry. Moreover, Bitcoin’s impressive record in December of 2017 had made investing in cryptocurrencies a viable option. Although the price of Bitcoin has gone down in value, some experts predict that prices could go higher than that of 2017 in the future. They predict that cryptocurrencies will go mainstream within the next decade. Various developments in the industry suggest it may happen sooner.

For starters, some of the challenges that cryptocurrencies presently face may be overcome in time through future technological advancements. For example, currently, an investor can lose digital assets through a computer crash or hack (though a cold storage wallet can greatly reduce this risk – a paper wallet being the most extreme example of a cold wallet). There’s the possibility that future digital innovations may focus on providing highly advanced, secure, and hack-proof systems that are way beyond those in existence today, like our advanced Blockchains.my wallet. Furthermore, the number of merchants accepting cryptocurrency payments has significantly increased. Although they are still in the minority, there’s always room in the future for mainstream adoption of cryptocurrencies in the market.

Some of the things that experts predict will propel cryptocurrencies into mainstream adoption include:

  • Cryptocurrency technologies can be faster and more affordable in conducting transactions in some cases.
  • Cryptocurrencies provide end-users with an immense amount of conveniences such as cashless transactions.
  • Cryptocurrencies have proved themselves as capable public speculative vehicles (though highly volatile). .

Cryptocurrencies’ Future as a Failure or as a Mediocre Technology

Cryptocurrencies were created to be decentralized in nature. However, the more popular they have become, the more regulation and government scrutiny they have attracted — a act that has significantly eroded the fundamental reason for their existence. Furthermore, as much as the number of merchants accepting crypto payments has grown, their complex nature has deterred most people from actually using them. The fact is that if any cryptocurrency aspires to become mainstream, it may have to satisfy a widely divergent criterion. For instance, it would need to be mathematically complex, enough to prevent fraud and hack attacks, while at the same time be decentralized and easy to understand, with consumer safeguards and protection.

Since some of these criteria are extremely difficult to satisfy, the chances are that cryptocurrencies could pick up attributes that fall between heavily regulated conventional currencies and today’s cryptocurrencies. Furthermore, critics argue that cryptocurrencies can never replace national currencies as they are deflationary. This means that most people will be encouraged to hoard them rather than spend them, which may have a detrimental consequence on the economy. Moreover, with this kind of currency, some may argue that the government would have a hard time reversing a recession (although that’s not really the government’s job and they’re horrible at it… in fact, their economic meddling may well be the reason for such a recession – see financial expert Mike Maloney’s “The Hidden Secrets Of Money” series). On the other hand, cryptocurrency transactions cannot be reversed. Therefore, any typo or error results in the loss of money.

Other factors that experts cite as reasons why cryptocurrencies may end up as complete failures or at least end up being mediocre assets include:

  • The real-life applications of cryptocurrencies are presently very few. Moreover, there is no widespread adoption of cryptos globally.
  • The market caps or cryptocurrency valuations of most cryptocurrencies seem highly unrealistic or are in no small extent inflated and are based on investor speculation (or outright manipulation).
  • Cryptocurrencies raise many issues around investor protection, money laundering, market integrity, tax evasion, terrorist financing, and circumvention of capital controls.
  • Most cryptocurrencies exhibit classic characteristics of bubbles such as producing significant gains for early investors, mass public participation increasing prices to unsustainable levels, and an eventual decline in value.  

Conclusion

While opinions remains divided as to what the inevitable future of cryptocurrencies will be, crypto-enthusiasts point to cryptocurrencies’ growing use as critical drivers of their success, while critics argue that cryptocurrencies are just another speculative bubble waiting to pop. Cryptocurrency technologies and those in related fields are developing at an incredibly alarming pace, and are receiving increased attention from global mass media. One can perhaps entertain the idea that we are in the early stages of the most significant change in technology since the discovery of the internet.

Therefore, as these technologies continue to mature, real-world use cases of cryptocurrencies may increase more than we see presently, and potentially reduce some speculative industry elements. However, if you are considering investing in cryptocurrencies, recognize that you run the risk of losing most of your investment, if not all. Therefore, one should at least consider investing in a highly secure and advanced digital wallet. We invite you to check out our Blockchains.my (BCMY) wallet app.