New year, new cryptocurrency predictions

Happy (belated) New Year! I intended to get this post up earlier, but I’ve been under the weather lately.

Now that we’re about a week into 2018, it’s probably a good time to talk about what’s in store for cryptocurrency as this decade winds down. I see daily questions from readers about my opinions on what the future holds, and I typically don’t respond (especially regarding price predictions) because I just don’t know what’s going to happen tomorrow. With that said, I do think it’d be fun to take a few educated guesses regarding major cryptocurrency developments that’ll probably happen in 2018-2019.

Read on for a look into CryptoBadger’s crystal ball!

Prediction #1: six-figure bitcoin value

Let’s get the price talk out of the way first: I believe that there is at least a 50% chance that one bitcoin will be worth more than $100,000 by the end of 2019.

With the current BTC price at less than 1/6th of that, a $100,000 BTC price prediction in under two years probably sounds absolutely insane to many of you. And in a sense, it is—Bitcoin has a well-established history of insane price growth, growing via means of increasingly spectacular bubbles.

The $100,000 prediction by itself isn’t that outlandish, as a quick Google search confirms that quite a few well-respected experts believe Bitcoin will get there eventually. Before 2020 might seem optimistic, but I believe we’re on the cusp of Bitcoin’s early mainstream adoption phase as a legitimate (and preferred!) store of value, and the next couple years will see continued tremendous growth as we ascend the adoption S-curve.

It goes without saying that I could be wrong—and we’re just in another Bitcoin bubble. If that’s true, we might even see another extended period of bearishness following the crash (like 2014-2016) that leaves us with a bitcoin price in late 2019 that’s lower than it is today.

Prediction #2: increased government regulation

The nature of cryptocurrency puts a few practical limits on how effectively governments can regulate it, but I think we’ll see some additional controls put into place over the next couple years. Light government regulation and some basic protections for investors isn’t necessarily a bad thing.

First, the IRS recently won its fight against Coinbase to secure records of heavy bitcoin traders. You can bet that as cryptocurrency becomes mainstream, laws will be enacted to ensure that governments can effectively tax capital gains on coins. Expect US-based exchanges to eventually be required to report all cryptocurrency trades, similar to how stock and commodity trades are currently reported.

Second, the SEC has started paying attention to ICOs, even going so far as to shut one down. I certainly hope we’ll see more of this, as scammy ICOs fleecing naive investors hurts the public’s perception of cryptocurrency.

Prediction #3: slow death of worthless ICOs

The current ICO craze is out of control. Every day, some new coin or token pops up without a working implementation or feasible plan to create one. Many of these ICOs lack realistic use cases.

And yet naive investors pour money into them. Seemingly anyone that spends a few weekends putting together a professional-looking website and white paper and then plastering social media about it can be rewarded with a multi-million dollar valuation overnight by unsophisticated investors that don’t want to miss out on “the next bitcoin”.

Over the next couple years, it’s likely that most ICOs will be abandoned by their creators, causing people to pull their money out. Quite a few investors will get burned as their tokens become worthless, which should hopefully cause the public to be a bit more critical of ICOs. This, combined with stricter government regulation (see #2), should cause the ICO craze to die.

To be clear, there are some token projects out there that are creating unique and potentially useful products. It’s difficult to distinguish them right how because there are so many pretenders looking for a quick cash grab clamoring for attention. When the current craze dies down, the field should thin to the point that legitimate, quality projects are the majority.

Hard forks of existing established coins get a special mention here. Any coin fork that receives even a small fraction of the main coin’s valuation can potentially create a tremendous amount of wealth essentially out of thin air (e.g.: Bitcoin Cash), so there is a huge incentive for people to keep trying to split coins for personal gain. As people repeatedly try and fail to fork established coins, the public will eventually become saavy enough to ignore them completely.

Prediction #4: Amazon accepts cryptocurrency

I’d be mildly surprised if this one didn’t happen in 2018, and shocked if Amazon still wasn’t on the cryptocurrency bandwagon by the end of 2019.

Given the low adoption rate, there wasn’t much incentive for Amazon to take payments via cryptocurrency before now, but given the recent surge in media attention, it feels like the timing is right for them to start seriously considering it. Potentially cutting out credit card merchant fees (and removing the possibility of chargebacks) on even a small percentage of transactions seems pretty attractive.

Amazon may be waiting until Bitcoin’s Lightning Network is ready (Bitcoin in its current state is not suitable for day-to-day transactions due to high fees and slow confirmation times), or they might surprise us and adopt an altcoin (I can’t envision them picking anything other than Litecoin if they go this route).

Whenever Amazon does commit to cryptocurrency, expect other major internet retailers to rapidly follow suit.

2 Responses to New year, new cryptocurrency predictions

  1. Steam takes bitcoin already, and has some quite some time now. I’ve made 3 transactions thus far, yes the fees were astronomical, but I learned that they can be turned down greatly in electrum. Still, it was 10%+ just in fees… hopefully this will be solved by using a alcoin with lower transaction fees in the future… if amazon starts taking bitcoin, I could see it tripling in price overnight.

Leave a Reply

Your email address will not be published.