People love predicting what the future has in store for them. They predict sports scores, the way their interactions with other people will go, the weather etc. One thing we have recently started predicting the future of are cryptocurrencies.
Many of us are looking to be in the crypto space for a long time and will therefore try to imagine what will happen in a day, month, year, five, ten, twenty years from now. Predicting the future events is usually based on previous experiences, acquired information, trends and expectations; as such you can never be sure that your prediction will be spot on. People speculate based on what they know, but sometimes there is information that they don’t have access to that makes them predict wrong. Other thing worth considering is that what you know today might drastically change in the future, especially in the world of crypto.
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The lack of clarity that surrounds the future events doesn’t stop us from entertaining thoughts about them. Cryptocurrencies are a hot topic for such thoughts, since properly predicting the way crypto markets will go can net people astronomical financial gains. At the same time, predicting wrongly can lead to people losing their money faster than you can say “CNBC Fast Money”. From where we stand right now, not a lot about crypto can be predicted with a whole lot of certainty. Still, some things look more likely to happen than others.
About the next bull run…
Looking at the general picture, you have probably noticed that we are currently experiencing a pretty bad bear market. Bitcoin is down 80% with alts being down on average more than 90%.
Most people are wondering if and when will this negative trend be broken. For now, it’s hard to say when, but we are almost certain that it will happen. At the moment, there is a lot of room to go either up or down. Some experts claim that the bottom of the trend has almost been reached, that the sellers who fuel the bear market are worn out and that an upswing is about to happen. Others believe the trend can and will continue, claiming that the buying volume isn’t there, that we can go down a lot lower than the spot we are in right now.
Mcafee could be eating more than his words come 2020
In reality, no one can answer these questions with complete accuracy. However, it is almost certain that we will need a strong catalyst or a series of catalysts to kick start the upcoming bull run. Big technological breakthroughs (oracles, interoperability?), institutional money swooping in and giving the space legitimacy, government regulators creating a framework that will let investors feel safe and able to retain all their gains are just some events that could encourage the market into growth.
It does seem like most investors are waiting for the government to clear things up. Central banks softening up and investing some of their holdings into Bitcoin or other currencies, maybe even accepting Ripple or a similar interbank payment clearance system could also be important. There are talks of a physical ETF (Exchange Traded Fund) for Bitcoin being created and this could materialize sometime around 2019, if not sooner.
Whatever kick starts the next run, it is almost certain that it will be a massive one. If the catalysts turn out to be strong enough, we could be looking at coins whose valuations will rise into trillions of dollars, similarly to what happened post the initial dot.com bubble crash. As the market cycles go, after Bitcoin and the larger currencies explode, investors will start investing into lesser altcoins in an effort to find the next big thing. This will have negative effects on the market as a lot of money will end up in the pockets of bad projects, similarly to what happened during the 2017 ICO-mania (and is still happening but to a lesser extent). At this point, a new bubble will be created and the market will soon experience another major correction, where Bitcoin will drop 50, 60, 70 percent or even more, completing the cycle and leading us to a similar spot we are in right now, just with a lot more people crying about selling their mortgages to invest into the next Bitconnect.
Bitcoin will probably remain dominant
What is likely is that Bitcoin will remain the most prudent thing to invest in. It’s the king of the market for a reason (a safe, immutable store of value) and will almost definitely retain its throne in the future. Some people will prefer to diversify and invest into more than just Bitcoin, as that’ll give them potentially higher ROIs. Others will do so out of belief that diversification reduces the risk of investing. This is debatable in a market controlled by Bitcoin, where every alt slingshots in whichever direction the king goes in.
Another likely thing is that the gap between the top of the market and the “pleb” currencies will grow even further. New money will be looking for risk managed investments and will FOMO into blue chip currencies like Bitcoin, Ethereum, XRP and whatever remains in the top 5/top 10 of the market. Tron is looking poised to capture a lot of interest from the Asian markets, even though its western marketing leaves a lot to be desired. Will EOS recover and manage to develop into Ethereum 2.0? Will NEO, Cardano, Zilliqa beat them to the spot? Will Stellar Lumens replace Ripple as the darling of the banks? At this point, it’s a fool’s errand to guess.
Blockchain adoption is coming. Or is it?
The truly important part of the future will be the adoption of the blockchain technology. As it stands, the infrastructure simply isn’t able to support any kind of commercial use, let alone “change the world” as many projects so boastfully claim in their whitepapers and promos.
This year will almost definitely be fueled by speculation and promises, as many experts predict that commercially capable blockchain projects will start showing up at the tail end of 2019 and across 2020.
True commercial grade adoption of the blockchain is expected in mid 2020’s. The required infrastructure will be in place and people will start buying cryptocurrencies not for their speculative value, but rather for their real world use case.
The markets will be much more stable then, as speculators will not have that much space to manipulate them, and we will see crypto Apple, Google, Amazon and such take their spots as the cream of the crop.
We can’t say for sure which projects will be the ones to take these coveted titles but we can say that the battle for them will be a very bloody one. All in all, the current roadblocks are there to weed out the weak hands and weak projects. Once the bad leaves are shaken off the tree of crypto, smart money will move in and pick up the pieces.
Or perhaps not. After all, institutional money is mostly in the hands of investors who control most of the establishment that crypto is looking to bring down. Why would Warren Buffet or Rockfeller invest into a competitor to its banking system? The blockchain technology does remove a lot of costs related to any financial system; will the banks entertain said technology to cut current costs, knowing that the final cost may end up being them getting removed from the system?
All things considered, we can’t accurately confirm what will happen in the future. What we can confirm is the value of the blockchain, especially the decentralized one. In its ideal form, its safety, immutability, speed and simplicity of use could indeed change the world for the better (however cringy that sounded). It is hard (if not painful) to imagine a future where humans will miss out on taking advantage of a revolutionary invention like this one and fail to bring it to its full potential.