The market value, which reached 850 billion dollars with the rapid rise in December, has started to decrease in value as of the beginning of 2018. There is no reason to be pessimistic since institutions are stronger than ever. What will happen in the cryptocurrency market in 2018? What will be the future of ICO investments?
We will see various changes in the cryptocurrency field in the sense that the capital flow will enter the market. Although financial institutions seem to stay away from the cryptocurrency, it is really hard to believe that they still do not get into the cryptocurrency market. In 2018, key roles can still be undertaken, taking into account the methods that financial institutions can serve in this area.
We will also see people have new ways of investing through mutual funds, hedge funds, and even pension funds; therefore, we can see various corporate services offered for cryptocurrency investments in 2018.
ETF (exchanged-traded fund) in 2017 has been the scene of speculations about the future of Bitcoin by companies such as CME Group and CBOE. 2018 will be a year when the institutions will continue to have doubts about cryptocurrency; however, the increasing demand indicates that financial institutions must invest in this area in one way or another.
Institutions from traditional investment area such as Goldman Sachs and JP Morgan have had considerable knowledge of cryptocurrency, and it is expected that companies get into the market seriously in 2018.
Those who have a tendency towards value-creating investments have invested by taking into consideration that there is no risk in their long-term investment in cryptocurrency. Those who regard it as a dangerous game were stuck in a difficult situation when they got in trouble.
The number of people who were exposed to the increasing fraud incidents related to cryptocurrency investments, unsuccessful projects, hacking, bankruptcy or fraudulent ICO, etc. increased. As a result of these bad experiences, we hope to see investors invest in durable projects by taking into account the possible disadvantages.
We estimate that people who suffer from exchange and manipulation will prefer more robust projects this year and that they will be able to accommodate investments, by which they can get income due to factors like PoS and Pow, in their investment baskets. At that point, among the usual cases of volatility, there are projects that cannot meet the value/investment parities and lose reputation because they cannot satisfy the expectations. Meanwhile, we can see projects that drop out of the market by falling to scam; so, people may be expected to return to long-term value investment instead of speculative investments especially after they have their fingers burnt because of the snowball effect caused by these.
We saw a lot of projects that work well without the token. But after successful ICOs for global financing, it has also been seen that many irrelevant projects have gone to unnecessary token use. Technically speaking, even if the project is considered to be the best of the current projects, it is not a matter of whether or not the tokens will be somehow used in this project.
There is a blind deceptive period in every market where people earn a high amount of money in the first flow. But as we see less speculative pumps and ICOs left once they get into the stock, we think we are moving towards a new phase.
Another issue to be considered is that we witness more and more real projects in bilateral trade in stocks, or even in bilateral trades where the real money is exchanged. In this way, many more people can invest. We can also imagine that larger projects will secure their positions and continue to exist, thanks to the established ecosystems and the online feedbacks they create.
Scalability and innovation
2018 is expected to be the year of scalability at the same time. In order for cryptocurrencies and the blockchain to be prevalent in the corporate use having global trading volume, their real-world usage and applicability are based on scalability. Although there is no problem with global access, the increased number of transactions also leads to blocked networks due to prolonged transaction durations and the limitations on the number of transactions that can be performed per second. This limitation is now the biggest obstacle for the blockchain and cryptocurrencies.
The scalability of Bitcoin and Ethereum systems is still a major debate. Discussions around the Lightning Network, Casper, Plasma, and Sharding sometimes lead to the blockchains that solve these problems. Maybe we can see projects that solve this scalability problem completely.
It will not be possible to completely eliminate the scalability problem by the end of 2018. We will see much more work on scalability as blockchain technology spreads to business ecosystems, especially because of its working principles and approach.
The role of companies
With the increasing interest in blockchain technology, we have seen big players come to this stage as well. Samsung and IBM are probably the most important examples in this issue and are working on their own projects. Moreover, while steps are being taken to ensure that Estonia’s entire health and digital infrastructure works on blockchain technology, the productivity of this technology becomes prominent.
In 2018, the greatest expectation in this sense is that other big companies get into this area and develop their own projects by using blockchain technology. The direction of the expectations is always less operational inefficiencies and contribution to solving existing problems.
Hack, fraud and decentralized stock markets
We will go into a period in which decentralized stocks will start to rise so that hack scandals cannot lead to the loss of the digital money, which is equivalent to huge sums of money for people. Thanks to projects such as OmiseGo, 0x or Request Network, and with the support of hardware-based wallets, a sector that can accommodate a decentralized stock market will be safer and more voluminous based on this faith. In the meantime, we have a lot of reasons to think that by 2018, security vulnerabilities will increase and users haunt users.
The year of altcoins
The market size of the Altcoins reached $370 billion at the end of the year, up from $2 billion at the beginning of 2017. With the better understanding of block-chain technology, there have also been many projects that have tended to take up a large share of the market. In this context, the investment word started to mean more than Bitcoin, and the altcoin market is growing in parallel with this.
Altcoin market will continue to grow and human psychology plays an important role in this sense. Because the money earned through Bitcoin is unfortunately not enough for investors. For this reason, the flow to altcoins will increasingly continue in order for investments to increase incrementally. Along with this increase, the determinant role of Bitcoin in the market may lose its power a little and Bitcoin dependency will decrease as the number of altcoins opened for bilateral trade increases.
2018 will be the year of regulation as well. Now, together with the works done in the last periods, the states are either working on new regulations or strengthening their position on cryptocurrency. Regulation by itself, naturally, evokes negative meanings, but it is also necessary for progress.
So far, we haven’t faced any regulation which has influenced so much. Regulations have an important place since they give an official validity to cryptocurrencies. For sure, we have to accept the fact that they occasionally cause fluctuations in the market, but it is usually fast for the market to recover itself. As this kind of entity is accepted more it becomes important how the state accepts it. The regulatory steps which have been taken so far will continue to increase, and the general tendency will be to accept and set up certain rules on it, as there is technically no way to prevent them, even though the actions of states cause short-term fluctuations in the market.
It is an indisputable fact that countries that get closer through other technologies developed on the blockchain, including blockchain technology and mainly cryptocurrency, will benefit from this in medium and long-term by attracting investment, especially through projects and initiatives. If states accept the presence of digital values that they do not control as the first step and move on possibly problematic processes can be easily eluded.
Stock market wars
Of course, it is the stock market which allows the whole economy of cryptocurrency to function. Stock markets do not have any standardization regarding services they offer and commissions taken from users. Therefore, the type of money you are trading, the type of money you want to withdraw, and whether the transaction has a bilateral trade option or not is the differences that influence users in the selection of stock market.
Not only dual listing, but the stock markets working totally against Bitcoin can be expected to offer real money-bilateral trade option. Once the real money is involved, regulations become harder, even we can think that this leads to dead-ends at some points. There is no other way than hoping that these will be solved between the regulation institutions and the people interested in cryptocurrencies depending on goodwill.
Each stock does not have activities such as exchange in return for real money in global scale or serve for each coin. In this respect, we expect serious competition in the globalizing world regarding the prevalence and globalization of the business related to the investment of cryptocurrency.
2018 will be the year in which things will be put right and more conscious investors, an economy and an ecosystem that will grow along with ICOs opened for more accurate projects will welcome us. For sure, we will see exaggerated pumped tokens or business whose basis is problematic again; but we will witness the times in which investments will shift to platforms, enterprises and trustable institutions instead of coin thanks to more conscious investors and users.