The year of 2017 will definitely be remembered as a defining year for cryptocurrencies. With Bitcoin hitting a new all-time high of $6255 and pushing its market cap, to over the $100 billion mark this morning, there is no doubt that the kingpin had a good year. The other cryptocurrencies also did well this year. The nearly 1200 other cryptocurrencies have a combined market share of nearly $70 billion.
Bitcoin has rallied over 500% this year, and many believe that the train hasn’t even left the station. Next on Bitcoin's hit list would be the seemingly unattainable $10,000 number. Unattainable you may think? The jump would only represent a 67% gain compared to the already 500% we have seen year to date. With increases of 2000% over the past two years and 2,000,000% since 2010, there may be nothing that can stop the year of Bitcoin.
The driving forces likely to propel Bitcoin to new heights encompass both emotional and tangible elements, with both playing dramatic roles in furthering the rise of both Bitcoin and most cryptocurrencies in the near future. The four major reasons are as follows:
The most tangible and notable element that Bitcoin brings to the table is Blockchain. The Blockchain is a decentralized ledger that allows all Bitcoin transactions to be completed without using a third party intermediary like a bank. The key to “blocks” produced by the Blockchain is that they are open-source and available for everyone to verify. This makes it very difficult to complete a fraudulent transaction.
Although the price of Bitcoin is difficult to determine, the value of the Blockchain is unquestionable. It is very likely that this technology will be adopted by virtually all business as a way to complete safe, fast, and cheap agreements between two parties. Also noteworthy is the direction Bitcoin has taken to market itself to enterprise. The new software updates have targeted speeding up the network and lowering processing fees to lure businesses into using the cryptocurrency.
The US dollar has been falling and recently dipping for a two year low against the Euro and a one year low against most other currencies. With a falling greenback, investors traditionally look to gold because of its finite properties and its long term proven storage of wealth. With Bitcoin also being a finite resource and having only the potential of 21 million coins in total, investors are seeing the cryptocurrency as a very profitable and safe storage of wealth. If the US dollar remains weak it’s very likely that Bitcoin will push to even higher levels.
Bitcoin Adoption as Payment
As more and more large retailers start accepting Bitcoin its value will obviously increase. Virtually all major online retailers are starting to accept or at least are looking into accepting Bitcoin. The beauty of accepting Bitcoin is that there are no fraudulent transactions and the merchant has very little fraud risks.
Bitcoin also offers solutions for business that have difficulty finding banking options like the Cannabis industry. Many banks are not willing to process payments for these businesses, leaving an open opportunity for Bitcoin. Customers will simply use their cash debit or credit to purchase Bitcoins and then use those Bitcoins to purchase whatever they need. Bitcoin can then easily be converted back into cash by the merchant for a small fee. The more businesses that adopt Bitcoin, the greater increase in price it will see.
When you consider that the price of Bitcoin has risen 500% in just 10 months, and over 2000% in the past two years you can't help but feel like you need to catch a piece of the action. The feeling from retail investors that they are “Missing the Train” runs heavily throughout the Bitcoin community. Even at record prices there are no shortage of retail investors willing to jump on the “Train” and hope it leads straight up the mountain. The more people that believe in Bitcoins value, the more the value will continue to skyrocket. The interesting part is that most of the investing is done at a retail level. Not many corporate investors are spending money on cryptocurrency. Once the big guys start to come aboard and invest substantially, that is when you could really see the prices start to jump.
The notion that Bitcoin could reach $10,000 by the year 2018, just a few years ago, was one that few people predicted. That being said, the tangible and emotional interests in Bitcoin have propelled it to this point, and some experts believe it’s only the beginning. No one knows for sure how the cryptocurrency market will play out in 2018, but if current trends continue, we can expect almost anything out of Bitcoin.