2017 proved to be a breakout year for Bitcoin, with nearly a twenty-fold increase in value over the course of the year, jumping from around $800 to just under $20,000 at recent highs.
With the absence of an obvious economic backing, some analysts predict that 2018 will be another banner year, while others are more skeptical and calling these restless climbs a bubble that is waiting to burst.
In the last few days, traders were reducing their exposure to the digital currency, which was in part attributed to profit taking ahead of Christmas lull. The pattern may persist for another couple of days due to revival of the so-called Segwit2X hard fork, which is planned to be carried out before the year-end.
A wide range of investors are reportedly anticipating the potential split by pulling capital from the market or otherwise placing bets that Bitcoin’s price will decline in the short term. One thing is certain: the negative impact, if any, is to be short-lived as the development itself aims to increase transaction speeds and reduce the cost through off-chain scaling.
Nevertheless, one may expect the new year to see a relative price stability, with lower volatility than the cryptocurrency markets had been experienced in the past. The assumption is based on predictions of throwing out the casino mentality and conceding that Bitcoin shouldn’t be directly compared with the traditional measures for stocks or similar assets.
Indeed, we are talking apples and oranges when talking every while about the price bubbles, despite the fact of Bitcoin’s truly mind-bending appreciation. This approach could be also fueled with the virtual coin gaining wider acceptance as the network becomes more and more legitimized with far less suspect/speculation activity, while the crypto economy grows and matures.
That said, leaving aside the price-related matters, usage is outpacing Bitcoin’s swings. In other words, blockchain is much more than prices of its crypto assets.
The technology behind bitcoin holds a lot of promise for all sorts of use cases. On the investment front, nearly $4.0 billion raised this year in ICOs, and we are still early in the exponential curve, just as more new projects are established around a token-economy. This volume growth is while most institutional players are still sitting on the sidelines, waiting for the newly-launched regulated derivatives to mature.
Over the course of next year, a lot of ideas and assumptions regarding the technology and its coins will be tried out, even though those along the sidelines will keep calling it a tulip bubble.
Many relevant industries have never had an element so global and so artificially scarce before, so it’s really out of Pandora’s box. But although no one wants to be on the wrong side of a bubble, there’s no way to put the whole story back again.