2018 started with absolute ecstasy in the cryptocurrency space. However, what was a dream quickly turned into a nightmare as new investors watched 60 percent of their portfolio evaporate in under a month. Those experienced in the crypto space understand these corrections regularly occur. However, many new investors were scared off and left with the question; what will 2018 entail?
The beginning of 2018 was somewhat of a massacre, as January provided a correction that had not been seen in eight months. The problem was the majority of new market entrants were still filled with exuberance for having made their first 100 percent, and the rattling of such volatility truly scared them. The positive news is in analyzing 2018 it seems highly unlikely the volatility continues to such a significant degree. This will be coupled with a year filled with government regulation and mass adoption by both the public and businesses.
2017 was a year of speculation, 2018 will be the year of exponential growth for the blockchain and cryptocurrencies with actual utility. There are eight reasons 2018 will surpass 2017 for the best year on record for cryptocurrencies and the blockchain.
Legitimate Scaling Solutions
Bitcoin (BTC) was the first cryptocurrency and introduced blockchain technology back in 2009. It took a few years before there was enough adoption of it to notice issues with scalability. The cost of each BTC transaction was rising as more users were using the network. Bitcoin is by far the most important cryptocurrency being the original, the most recognizable brand in the industry, and having recently made many upgrades to help alleviate scaling issues they had faced. Most individuals, institutional, and government money that goes in and out of the crypto space starts and ends with Bitcoin. This creates a market where BTCs dominance is around 38 percent.
Originally the author was not a fan of BTC having just watched Bitcoin Cash (BCH) perform a successful fork that greatly sped up transaction times while reducing transaction costs. What would the purpose of BTC be if BCH was faster and cheaper to use? Well BTC heard these concerns voiced by the public and has implanted multiple features that greatly speed up transactions while reducing costs. BCH once looked to make BTC obsolete, now the tables have turned, and BTC once again seems to have the “brand name” and competing transactions speeds and costs.
BTC implemented the “Segregated Witness” protocol which allowed for 100 percent more transactions per second. This greatly sped up transactions and reduced their cost, but is only the first step of many with scaling. The improvement on this solution will do exponentially more than increase BTC’s maximum capacity by 100 percent: introducing the Lightning Network.
The Lightning Network decreases transaction costs to almost nothing while increasing scalability indefinitely. As the first transaction on the lightning network took place December 31, 2017, the technology is in its infancy. There are more nodes being added daily providing a continued increase in capacity. These second layer networks solve the problems bitcoin faces regarding scaling even post the recent scaling upgrades the network underwent.
Scaling solutions like the Lightning Network can be applied to other cryptocurrency’s as well, and that scaling ability will make crypto feasible when compared to credit card processing speeds and fiat capabilities.
Legitimate ICOs Rivaling IPO Markets
2017, and more specifically the second half of 2017, saw more ICOs than any period in cryptocurrency history. A few were a scam, and many do not intend to have working products or markets for months to come. However, 2018 should be the year of legitimate ICOs. These ICOs will be held by already profitable companies looking to go “public” in the form of a coin or raise money for a new project through the distribution of a token. The cost of raising venture capital funds or holding an IPO was a very expensive process, but an ICO opens a company to investment funding from the public without having to lose the huge percentage or pay the substantial associated fees. It is likely more well-known companies seek to raise money this avenue in 2018.
There are currently multiple ICOs that have raised over $100 million. Telegram is the biggest ongoing ICO followed up by an Asian Casino planned for Macau. Telegram has raised over $800 million in their pre-ICO; while Dragon Corp intends to raise $500 million for a floating cryptocurrency based casino off the coast of Macau. Kodak and Atari both have also recently announced plans for ICOs with fairly ingenious structures for both tokens. The ICOs are getting larger and are being held by more legitimate companies. A great sign for the cryptocurrency space.
Regulation from Government Bodies
Cryptocurrencies were supposed to disrupt the centralized banking system. Thus far they have already begun to show signs of doing so with banks taking out advertisements throughout Europe saying how “Cryptos are bad for the economy.” However, there has also been an alternative approach taken by many banks choosing to begin using the blockchain and cryptos for their benefits. Banco Santander along with multiple others have deals with Ripple to use XRP to transfer funds between branches and countries. Governments are choosing to ban or regulate with the overwhelming majority choosing to take the approach of regulation.
Many believe regulations will hurt the crypto community as this movement was built on revolutionary foundations looking to topple the current centralized economic system and provide the underbanked masses with alternatives. However, for scams to be rooted out and legitimacy to be added for institutional investors, regulations must be in place. South Korea, Japan, Australia, and the United States are openly taking the route of regulation compared to an outright ban. Regulations will only continue to benefit how cryptocurrencies can be used interchangeably with regular fiat currencies, greatly increasing their utility.
Growing Utility of Coins
What creates true value is not the ability to exchange a cryptocurrency on an exchange based out of a foreign country with no regulations supporting it. True value in a cryptocurrency is created when its utility rises. Monero (XMR) is valued because it is the most adopted privacy coin and can be sent without revealing any information about the transaction. BTC is valued because of its “brand name” and status as first and the largest crypto by market cap. Ethereum (ETH) saw its value explode in 2017 due to its utility for buying into ICOs as most new ICOs held their token sales on the ETH platform. Utility creates much more long-term value than a tweet from a founder a coin is being added to a new exchange.
2018 should see cryptocurrencies gaining significant utility. As the utility increases the specific coins tied to that utility’s value will increase simultaneously. Litecoin (LTC) should have a significant boost when Litepay is launched, over the long term, as more people chose to spend their LTC driving up the demand and utility of the token.
Regulations allow for institutional investors to flock to the space. December of 2017 saw BTC futures added to the some of largest commodity exchanges in the United States. This further legitimized bitcoin and cryptocurrencies. Regulations will only continue to provide the backbone to allow institutional money to flow into the space. There are individual publicly traded companies that have market caps greater than every cryptocurrency added together. When institutional money enters the space for no other reason than the sheer quantity of it, the total market cap of the space will increase dramatically.
Conferences introduce cryptocurrencies to the masses. There are more conferences scheduled for the first three months of 2018 than all of 2017 combined. These platforms also allow for new ICOs to demonstrate their marketplaces and concepts. Besides being great networking events while displaying the latest technology, these events provide vital community outreach. The cryptocurrency community was once very small with little understanding of how the blockchain works.
Conferences provide educational opportunities for new investors while also driving significant amounts of money into the sector. The conference calendar has had two to ten conferences weekly since the beginning of January 2018. This means thousands and thousands of individuals across the globe are focused on blockchain development not as a primary job, but on their free time. Remember most conferences occur on the weekend which means individuals are actively choosing to dedicate their valuable free time to the future of cryptocurrency.
Public sentiment swings the value of the cryptocurrency markets significantly. In 2017 public sentiment was very positive and came crashing down in January. Newcomers who jumped on the crypto bandwagon in December saw 50 percent losses in one month and were shocked that what they thought would be a comfortable 100 percent actually cost them money. 2018 will be very different. Some of the biggest governments of the world have already stated they intend to regulate and not ban cryptocurrency. This will drive institutional money into the space while also giving the public a security blanket knowing the level of scams should decrease exponentially.
With public sentiment on the rise due to the markets being “protected” by government regulations and money being pumped in by financial institutions, it is very likely the crypto markets continue to experience substantial growth. This growth will be compounded when the public feels positive about the markets driving the value of all cryptocurrencies higher again.
Mass Adoption of Blockchain Tech and Cryptocurrencies Within Business
Unique pieces highlighting how the blockchain is already penetrating niche markets like Supply Chain Management and the Energy Industry have recently been written. It is evident that blockchain technology and cryptocurrencies are being adopted by both the public and businesses. This mass adoption will not drive the value of the cryptocurrency market down; it will provide momentum for a prolonged rebound from the January correction. Many companies are publicly working on blockchain projects, and even more tech companies are working on them privately. 2018 should see a huge boost in the adoption of the blockchain as it provides unparalleled security, transaction speed, and minimal transaction costs.
Conclusion: 2018 Will be the Year of Exponential Growth and Acceptance
There are eight solid reasons why 2018 should be the year of mass adoption and exponential growth for the crypto sector. Adoption will be fueled by government regulations paving the way for institutional money and larger more legitimate ICOs. 2018 is a very exciting period for cryptocurrency and those who have just survived their first market correction, congratulations! You survived! 2018 should be a year where investors reach new all-time highs multiple due to the revolutionary benefits of the blockchain.
To read the King’s prior articles, to find out which ICOs he currently recommends, or to get in contact directly with the King, you can on Twitter (@JbtheCryptoKing) or Reddit (ICO updates and Daily Reports).