This article tackles the debate what will happen to Bitcoin during 2018 by including value prediction, mining difficulty, forks, government actions and everyday use analysis. The ultimate goal is to predict how the crypto will behave in 2018 and whether it is wise to put your savings into the BTC.
We will clarify why some people call it a bubble while others say it can reach values only dreamed off just a couple of months ago. There are many different cryptocurrencies in the market that can be analyzed but this article will focus on what will and what could happen to Bitcoin during the coming year.
If someone, in the middle of the year 2017 told you that bitcoin could rise up to $20.000 in mere few months, you must have thought them crazy. Now, the coin went bananas and is going up and down in the measurement of several thousands of dollars.
So, what really pushed the coin into the growth spurt? The hard fork in August and then SegWit in December. The improvements to the network’s security and transaction speed made the coin quite lucrative. The value went over multiple times, almost reaching 5.000%, as shown in the picture below.
The trend might continue in 2018, mainly due to the large mining difficulty, keeping supply low and due to the planned forks. Bitcoin is still fighting its battle against scaling and high network fees. The development should pick the value up easily though probably not at the rate it did in 2017. But do not hold us to our word, as BTC proved last year that it can reach stars with right blockchain fixes.
A smart person would do well by timing the cryptocurrency market for bear runs. Since the value of Bitcoin is tied to its popularity, making an investment when the price is low would be a good move to make if you want to make a return on your investment. As time goes on, the value of Bitcoin will grow as more apps and platforms accept it.
One of the key stabilizers of the value is increasing difficulty though it can be considered as a double-edged sword. Taking a look at the last quarter of 2017 (and before that as well), it is clear that mining is becoming more and more difficult.
The mining efforts reached the point by which it was approximated that Ireland spends less energy in all processes than bitcoin. Although numerous forks are planned for 2017, the supply of bitcoins would gradually diminish, creating an environment for the coin to rise in value even further.
On the other hand, the inability to create bitcoins might push the individual miners to stop the operations altogether. Thus, the blockchain would become more centralized in its nature, as only a few large organizations would be able to produce the cryptocurrency. In this scenario, the value might go down as well.
Up to this point, there are about 25 bitcoin forks planned for 2017, creating numerous new coins, based on the same technology. All of these forks tend to propose improvements of the network. These improvements come in terms of transaction speed, privacy, size of block awards and other features of the BTC blockchain.
Some of the most notable forks that are expected in 2018 are:
– Bitcoin Atom (BCA): off-chain transaction and consensus modeling, bringing in increased security through PoS and PoW.
– Bitcoin SegWit2 X11 (B2X): increases block size awards and add a 2.5-minute block generation time.
– Bitcoin Pizza (BPA): uses IOTA altcoin’s DAG technology
– Bitcoin Smart (BCS): proposes smart contracting as well as 8mb blocks
These forks might push the value up if they are implemented successfully and marketplace adopts them. In the case of the opposite scenario, the price value might sharply fall though we deem this highly unlikely. Some of them might succeed and some would not, but the development is expected to go far deeper than it was the case in 2017.
It is up to the industry participants to take up the decision on whether they would support the changes. There have been many proposals in the past that failed to deliver their promises while the bitcoin’s mining inefficiency continues to grow. If these solutions would go live successfully, it might mean a start of a new BTC era in 2018.
Hard forks will be needed to address scaling issues that have plagued the bitcoin recently. The transaction costs, aka network fees, have seen an unprecedented rise in terms of fees and time needed for BTC transfers to take place. New developments should concentrate on shortening the transfer time needed while keeping the network fees low.
In 2017, governments went from passive mode to openly criticize the cryptocurrency industry, clamoring for more control. The decentralized nature of the coin is a bighorn in the eye of the regulators. Thus, we expect the Chinese measures to take place in other regions of the world in 2018.
ICOs would be banned altogether if not fully licensed by the financial institutions while platforms would demand complete KYC and AML compliance. This might bring more stability to the industry but could also slow down the growth of BTC.
On the other hand, several governments, Russian and Venezuelan particularly, expressed desires to create their own blockchain technologies. These, being backed by large funding sources, might become the main rivals of the bitcoin. The newly developed coins could take away a good portion of the market share, further slowing down the potential value spurt.
Shopping and Everyday Use
Due to the limited use of commercial worlds, with forks and more tightly legal obligations, bitcoin will most probably experience growth in online retail markets. We expect more and more businesses to start accepting the coin, especially if the value is to remain either stable or continually grow.
In the year 2018, we can definitely say that BTC will not reach the level of fiat usage. We do certainly claim that its use will be increased greatly from the current level.
According to the Reuters and several other reports, Nasdaq is poised to include bitcoin in its futures markets. The said inclusion can have a large impact on the coin, as traditional financial investors would now have the ability to take a closer look at the cryptocurrency.
This would increase the coin’s value and market penetration as well, pushing other stock markets to do the same. It would also make many other trade platforms to include the bitcoin into their product portfolios.
New User Registration Difficulties
Due to the booming growth of trade in BTC, the market grew tremendously as well. Large trading platforms, such as Bitfinex and CEX.io registered a sharp increase of new user registrations, resulting in shut down of the registration process. The companies that decided to close the web doors to new clients are Binance, Bittrex, Bitfinex and CEX.io, though the Binance and Bitfinex opened shortly after.
This is a good sign coming from exchanges, as companies show the interest of upgrading their systems to accommodate larger groups of people.
Taking everything into account, the year 2018 shall be a make-or-break year for bitcoin. With forks bent on improving the network and stock markets accepting the coin, the value might grow even further. On the other hand, if the said forks were implemented were not successful for any reason, the value and general popularity might go down. This is due to the tight competition from other coins and scaling issues.
Governmental bodies wish for centralized control, something that large organization s has been working on ever since. These factors can impact the bitcoin negatively since its original promise was security and decentralization of money.
The final verdict would be that its value and popularity would grow until the mid of 2018, while forks and new regulations would determine the future of the coin (and industry on the whole).
Read More: And where are we now? Read our Bitcoin Fundamentals Analysis in 2019