Crypto enthusiasts have probably been anticipating Bitcoin's global interest and eventual adoption for some time now, and 2017 seems to be the year for that to happen.
January saw the currency trading at $1k, while the last two weeks saw it jump from $10k to $14k to $18k. Some exchanges even reported Bitcoin’s price breaking through the $20k barrier. Its market cap of over $300 billion last week even surpassed that of Visa.
There are a few reasons for these phenomenal increases, one of them being an increase of buyers desperate to purchase their own Bitcoin in the hope that the currency will grow even more in the future. However, these price surges have paved the way for more bubble talk, and not just from cynics either.
Even though the currency has been presumed to be the preferred medium of exchange on the black market in the past, its current adoption is much more legitimate.
Support for the currency, in the form of integration in the mainstream financial industry, is becoming more common, with CBOE obtaining the bragging rights for launching the first Bitcoin futures contracts. CME is running a close second, and Nasdaq will be releasing theirs next year.
Even though this is an important step on the road to global adoption, it does come with its pros and cons. A benefit is that potential investors will be hedging their bets on Bitcoin without actually having to buy Bitcoin. This is a great option for those who are a bit wary of the crypto market’s trademark volatility.
On the flip side of the digital coin, if enough investors bet on the price of Bitcoin dropping, this could actually cause a drop. It still remains to be seen if investor sentiment will influence the price, and if Bitcoin futures as a whole will impact the demand for the cryptocurrency.
Even though big names are displaying an interest in Bitcoin, and virtual currencies in general, it doesn’t mean that individual investors aren’t keen to get in on the action. Last year saw Korea not interested in the crypto industry, while 2017 saw the country do a complete 180. Many exchanges in the country even have storefronts to help these new potential investors.
Japan has also embraced crypto by passing legislation that, in essence, legalizes Bitcoin and allows exchanges to obtain licenses. This has resulted in an increase in interested investors.
Coinbase is where it’s at for small-scale US investors. However, the online platform has been struggling to keep up with the influx of new members, likely due to the price increases of Bitcoin.
Even though China used to be the go-to country for Bitcoin activities, it has gone the completely opposite direction, closing down all of its exchanges in its continued crypto crackdown.
Safety concerns are one of the main reasons that most people are hesitant to wade into the crypto pool. Many exchanges are unregulated, which essentially means that nobody is following up on security. It also means that safety precautions aren’t created, and subsequently implemented, either. This could result in cyber attacks and hacks, which is what happened to Bitfinex, a major exchange, on more than one occasion.
In addition, if a Bitcoin wallet is hacked, there’s way to get it back, and no insurance to replace its contents either.
Speaking if wallets, it’s interesting to see that even though Bitcoin was initially touted as being a revolutionary new type of electronic cash, actually using it to buy anything is ridiculously expensive due to the transaction fees involved. This is why some people see it more as a commodity than an actual currency, something to hold onto and sell at its highest price to make a profit, or just a way to keep your money away from the prying eyes and hands of the government.
However, cryptocurrencies such as Bitcoin Cash and Monero are much better suited to use for online payments.
In fact, other popular virtual currencies such as Ethereum are having their moment to shine as well. Even though its price increases are not as dramatic as Bitcoin’s, they’re increases nonetheless.
Investors are also keen on contributing to custom cryptocurrencies through the ICOs of new platforms. These currencies are the internal mediums of exchange for these platforms and whatever service they’re offering.
Most people are wondering if Bitcoin will maintain this upward trend, with some, like hedge fund guru Michael Novogratz, adamant that it could trade as high as $50k next year. We’ll just have to buckle up and hold on tight because the Bitcoin bus is showing no sign of slowing down.