While bitcoin had a record year in 2017, there’s more in store for the digital currency in 2018. Here, the Investing News Network takes a look forward to the year ahead for the cryptocurrency giant.
Earlier in December the Investing News Network (INN) reported on bitcoin trends of 2017 and some of the biggest stories that happened throughout the year. Now, as 2018 approaches, it’s time to look forward to the year ahead and what’s in store for the digital currency.
To recap, 2017 was–without a doubt–the year of bitcoin as it slammed records continuously throughout the year and reached a high of $17,623.45 on December 12–soaring well above 1,600 percent since January 1. In addition to its price flying off the charts throughout the year, a number of government regulations came into play, bitcoin split into bitcoin cash and bitcoin gold, and the roll out of bitcoin futures and the potential of bitcoin ETFs.
Without further ado, here INN provides a look forward to the year ahead for bitcoin with insight from industry experts and analysts.
Bitcoin outlook 2018: price surge to continue
If there’s one thing bitcoin buffs and experts can agree on, it’s that its price will–indeed–continue to fly, although predictions vary (as expected).
One analyst in particular believes bitcoin could reach $100,000 by the end of 2018, which would be roughly a 467 percent increase from its current high on December 12.
“I wouldn’t be surprised to see a six figure headline,” Dave Chapman, Managing Director of cryptocurrency trading firm Octagon Strategy told CNBC in December. According to the publication, Chapman had predicted the digital currency would reach $10,000 in 2017. When bitcoin traded at $4,000 in August, Chapman alleged bitcoin would “have a five figure headline” by the end of 2017.
“I think a lot of people thought I was crazy, a lot of people scoffed at me, but that’s OK,” Chapman added.
Ronnie Moas, founder of Standpoint Research, originally told INN in November that his price target for 2018 was $15,000, although it has since surpassed that. Recently Moas has raised his bitcoin price target to $28,000 for 2018.
“You have $200 trillion right now in the world tied up in gold, stocks, bonds and cash,” he told INN in November. “I’m not excited about putting my money into any of those four.”
At the time, Moas told us that if one percent of the $200 trillion ends up in cryptocurrencies, it would become a $2 trillion industry in the next few years, which would be 10 times where it is right now.
“That is how bitcoin ends up going to between $50,000 and $100,000” Moas continued. In an interview with CBC, Moas raised that target to $150,000 if bitcoin is able to hold onto its current market valuation.
David Mondrus, CEO of Trive, told INN that it’s hard to say where the bitcoin price will go given its volatility. He added that bitcoin could go back to $7,500 “in order to have a nice little blowoff” and continue from there.
“It really depends on institutional investors and whether they believe that [bitcoin] is the way to go,” he explained.
Brian Kelly, global financial markets expert and founder of BK Capital Management echoed similar sentiments, stating that bitcoin will remain “very volatile” in 2018, although he stated that he is bullish in the long run. Still, Kelly stated that it wouldn’t surprise him if the digital currency pulled back as much as 40 percent.
“That being said, there is a wall of institutional money that’s coming at this market,” Kelly added. “That should provide some support for bitcoin in 2018.”
Bitcoin outlook 2018: bitcoin as an asset class
One thing that Kelly finds the most exciting about bitcoin is the fact that many are starting to see bitcoin as an asset class.
“Finally, institutions are saying that this is an asset class that we want to allocate to,” he said. “I think that’s going to lead to a lot of exciting things.”
With the digital currency effectively going mainstream, assisted with the launch of bitcoin futures in late 2017, the conversation about the digital currency as an asset class is getting louder.
Case in point, Leo Melamed, chairman emeritus of CME Group–the next to launch bitcoin futures and “the world’s largest derivatives exchange” said bitcoin could very well become a new asset class with the help from “major investors” taking part in bitcoin futures.
“That’s a very important step for bitcoin’s history… We will regulate, make bitcoin not wild, nor wilder. We’ll tame it into a regular type instrument of trade with rules,” Melamed told Reuters.
Similarly, Kelly told INN that over the next three-to-five years, bitcoin will become an asset class that “has outsized returns relative to any other asset out there.”
In addition to the Cboe Global Markets bitcoin futures which recently launched–and the CME bitcoin futures to launch on December 18–the NASDAQ is also preparing to launch bitcoin futures, although reportedly not until mid-2018, the Wall Street Journal reported.
With those three bitcoin futures combined, the reality of bitcoin being considered an asset class seems inevitable–now it’s just a matter of when.
Bitcoin outlook 2018: innovations await
It goes without saying that with bitcoin’s rising popularity, more and more people will be keen on the space and looking to adapt the digital currency and the blockchain technology behind it.
“There are a lot of projects that are being built out there,” Kelly explained. “I think 2018 will start to see some of those projects come to fruition and we will really start to see the promise of this technology.”
Kelly also said we should expect to see security tokens or stocks issued on a blockchain as a token.
“That will be the new way that people go public,” he said.
Mondrus expanded on that, stating that he expects innovation within the industry itself and the utility of those innovations outside of the industry.
Within the industry, Mondrus explained those changes include higher privacy, higher decentralization, and less reliance on third parties. The second thing, Mondrus said, is what he said is something called an atomic swap.
Mondrus said that an atomic swap is a decentralized exchange where you deal individuals where you exchange currencies that are not the same–for example trying to figure out how many litecoins to exchange for bitcoin– without a third party involved.
“Outside of the industry, I think we’re going to see a lot of utility using not just bitcoin, but blockchains, different kind of cryptocurrencies, ICOs, and tokens to change and transform the way the world does business,” Mondrus added.
Bitcoin outlook 2018: investor takeaway
Indeed, there’s plenty to be excited about as it relates to bitcoin’s outlook in 2018. While some investors may think it’s too late to get in on the bitcoin action, in fact, it’s just the opposite.
Meltem Demirors from the Digital Currency Group said in a CNBC video that it’s still “very early” and that retail interest has just begun.
“A lot of the buying activity we’ve seen [in late 2017] has primarily been driven by retail investors,” Demirors explained. “Institutional investors haven’t really had a way to get into the asset class.”
Demirors also said that with bitcoin futures coming into play, there will be a “much bigger run” coming in 2018 when more products and instruments come into market.
So–hold tight. If you feel like you’ve missed the boat on bitcoin, there’s hope yet–and–if you didn’t think possible–an even more exciting year for the cryptocurrency awaits.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.
The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.