Reason 1: Resolved scaling problems of Bitcoin and so called “second layer” technologies
Bitcoin is the most important cryptocurrency. Most fiat money comes via Bitcoinin the crypto market and goes out about Bitcoin again. Whatever affects Bitcoin has an effect on the whole crypto market. Currently, Bitcoin’s market dominance is at an all-time low of only about 30 percent. However, given the downward trend in its market dominance – which is absolutely normal as more and more Altcoins hit the market – it is clear that Bitcoin’s market dominance should actually return to 75 percent. For Bitcoin alone, this means an upside potential of 150 percent, which I consider 2018 to be absolutely realistic. Why? Because Bitcoin is the clock. Bitcoin has the most users as well as the largest industry behind it. He has only a few challenges to overcome. Most important: the scaling. Currently, Bitcoin can only do six to seven (with Segwit 12 to 14) transactions per second. Compared to credit cards that can handle thousands of transactions per second, the big criticism of Bitcoin’s scalability and usability is understandable investing in cryptos.
Furthermore, the scaling problems result in high fees. So what is the solution? They are the so-called “second layer peer-to-peer off-chain” networks. To German: networks that connect directly to each other on a second level away from the blockchain parties. The Lightning network is an example of this. It is being developed by Blockstream and is currently in its infancy. As in the linkAs you can see, more nodes and more payment channels are being set up. The growth is exponential. In the coming weeks and months, we will see more and more transactions and Bitcoins being used through these Lightning Channels. That’s gigantic. Not least because the Lightning network is free. It has no scaling problems and ties up the liquidity of Bitcoin. That could actually be the reason for a huge increase in the price of Bitcoin. At the end of 2017 I already predictedthat Bitcoin will see both the $ 5,000 and the $ 60,000. And Lightning will have a huge impact on the upside potential of Bitcoin. However, there are other factors, such as the Rootstock project, which would allow Bitcoin to perform similar tasks as Ethereum. These two projects and many more are very promising for the year 2018 and could result in a massive increase in Bitcoin’s price. I see the probability quite high. I would say in the range of 60 to 70 percent, with an upside potential in the price of Bitcoin of 100 percent, maybe even 200 percent and more.
Reason 2: Big and more legitimate ICO
Because an ICO requires a lot of ether and thus raises the demand for ether, just the big and legitimate ICOs will have a massive impact on the Ethereum network – like the ICO of last year. By 2018, more legitimate ICOs with better reputations will come onto the market, leading to greater interest in Ethereum, just as we can currently see in the billion dollar ICOs of Telegram and Kodak . I also think that at Ethereum we once again see the same increase in market capitalization compared to last yearbe experienced. I suspect a market capitalization of $ 200 billion, which is likely to double Ether’s price to $ 2,000. Obviously, similar things can happen with other platforms. Nevertheless, I think that the main focus will be on Ethereum.
Reason 3: Regulations
Regulation is usually why markets fall. But that’s a shortsighted perspective. In the long term, companies will actually need regulation because it will give them legal stability and security. This in turn gives users and institutional client’s confidence in investing more money in crypto. We have seen a similar phenomenon when Japan started to regulate Bitcoin. First, the market value fell, but soon after he rose again. The same was observable in Australia and China. When you thought that China would regulate (and perhaps even ban) Bitcoin, you could immediately see a strong case in the market before it rebounded. And I think we will see something similar with South Korea and probably many other countries. Perhaps Europe will also enforce cryptocurrency regulations. Yes, at first the market will be depressed and that is why I always see downside potential in the short term, but it is also why I see massive upside potential in the medium to long term. I think we will see more regulation this year, again with a probability of 70 to 80 percent with a positive effect on the crypto market. Probably the whole market will double in its total market capitalization for that reason alone. I think we will see more regulation this year, again with a probability of 70 to 80 percent with a positive effect on the crypto market. Probably the whole market will double in its total market capitalization for that reason alone. I think we will see more regulation this year, again with a probability of 70 to 80 percent with a positive effect on the crypto market. Probably the whole market will double in its total market capitalization for that reason alone.
Reason 4: Much execution and usability
There are many companies that are about to finalize their crypto products. Thus, 2018 will open many new doors for both the user and the dealer. This development will greatly enhance the reputation of the whole ecosystem, as companies cryptocurrencies begin to gain more and more trust. Those companies that put their ideas to good use this year will stand out and have a chance to establish themselves – only a handful of companies will succeed and most others will fail. Ultimately, the focus will be on the winners while the losers are forgotten. This will be a key point and have a very positive impact on the reputation of the ecosystem – just as Facebook’s success makes many people forget that most startups actually fail. I think the same thing will happen in the crypto market this year, and the success stories of a few companies will drown out the failures.
Reason 5: Institutional investors
The final reason is that 2018 will be the first year, with “solid”, institutional money flowing into the ecosystem. Based on a few rough estimates, probably between ten and twelve billion US dollars have flowed into the crypto-ecosystem. That’s nothing compared to what institutional funds could invest at the moment. With $ 10 billion to $ 12 billion bringing the market to around $ 500 billion, the next $ 10 to $ 12 billion, just a drop in the ocean, could easily double the market.
In summary, these five points will not all come with a 100 percent probability. But I would say that they are all in the range of 70 to 75 percent. And each of them has the potential to increase market capitalization by 50 to 100 percent, maybe even 200 percent. If we look at all these factors, the likelihood that the market will grow seven-fold, starting from today’s level, is relatively high. While this is a smaller multiple than last year, it is much more in absolute terms and can make 2018 the most successful year for crypto yet. Moreover, this growth will no longer be based on pure hype and pure hope, but on a solid foundation.