Previously, there were several potential explanations regarding the cryptocurrency bubble that could explode in 2018. However, there are several factors that can make 2018 the best year for cryptocurrency.
Bitcoin, which is one of the most popular types of cryptocurrency in the world, is estimated to have a potential increase of 150 percent for 2018. Taking into account several factors, such as the potential increase in the cryptocurrency market which can increase in price by seven or eight times the current price.
Previously, there were already various potential explanations regarding the cryptocurrency bubble that could explode in 2018. Many people ask, what will happen afterwards? What should be done when I have invested in it?
For those of you who are a coin investor, you should always calculate the potential tides and losses, and do not take unnecessary risks. Therefore, you will not invest too much or too little of your money if you use the right analysis.
The following are five theories that explain that in 2018 can be the best year for cryptocurrency:
Repair Problems
Bitcoin (BTC) is one of the most popular types of cryptocurrency in the world. Most government-backed money goes in and out of bitcoin, so what happens with crypto currencies that can affect the entire market.
The dominance of the token market was around 40 percent on Wednesday. With estimates, however, it is clear that the dominance of the bitcoin market must return to 75 percent of the total space. Therefore, there is a potential 150 percent increase in bitcoin for 2018.
Why?
Well, BTC is still dominant. It has the largest user base and the largest industry. Still, bitcoin faces challenges in increasing the scale of wider use. Now, bitcoin can't handle more than six or seven (or, with the "Segregated Witness" protocol upgrade, this is 12 to 14) transactions per second.
Compare this with credit cards, which involve thousands of transactions per second, so criticism about the ability of bitcoin to be useful on a larger scale can be understood. Scalability challenges also generate high costs.
What is the solution?
This is the second peer-to-peer back chain network. For example, look at Lightning Network. Created by Blockstream, the Lightning Network allows transactions from the blockchain, thereby reducing transaction costs and increasing speed and scalability almost unlimited, and that's just the beginning.
With more and more improvements in bitcoin in a few months challenging, we will see a sharp increase in bitcoin transactions and use more on this channel. What's more, the Lightning Network doesn't have any costs. In other words, the second network solves the problem of bitcoin - scalability and lack of liquidity.
That could be the main reason why this year could be the best year for bitcoin. By the end of 2017, bitcoin was predicted to fall as low as $ 5,000 - but potentially up to as high as $ 60,000. Lightning Network will have a big impact on upside potential. There are also other second projects such as Rootstock that allow calculations similar to ethereum (a block-based computing platform that supports other cryptococci named ether) which must be done through bitcoin.
Interesting projects such as those that can cause significant price surges on BTC. The price increase is estimated at around 60 to 70 percent with a 100 percent increase in potential - and maybe even more.
Larger ICO scale
In 2017, the initial coin offer (ICO) will have an impact on the ethereum network because ICOs usually require a lot of ether. This will support the demand for the digital coin platform. A more legitimate ICO will generate greater interest in ether as we have seen with millions of dollars worth of ICO provider applications and Kodak.
That is, we can see ethereum's market share increase to $ 200 billion at the end of the year from less than $ 90 billion on Wednesday. The price of cryptocurrency can double to $ 2,000. Although other platforms can see similar benefits, but ethereum will remain the main focus.
Regulation
Many believe that tightening regulations can hurt the market, but that is a short-term perspective. In the long run, companies need regulations for legal stability and certainty. In addition, regulatory tightening will also give confidence to users and institutional clients to invest.
The same thing happened when Japan began to regulate bitcoin. The market dropped at first, but eventually rose. Ditto in Australia and other countries can follow the same rule book - we will see something like that with South Korea and maybe many others - but the fate of the market will not be different from what is played in Japan and Australia.
The number of uses and trade
There are several start-up companies engaged in debit cards, offering debit cards to help people spend their cryptocurrency assets. This shows the number of users and merchants has increased sharply in 2018.
In addition, this will make the cryptocurrency reputation even more crucial, with more and more companies trusting them. Companies that run well this year will stand out and create a defensive bias - where some companies develop and others fail, but people focus on winners and ignore losers.
Most start-ups, but the spectacular success of companies like Facebook and Airbnb help overcome these failures. Likewise, the success stories of several entities in the cryptocurrency market will overshadow the negative news of several bankrupt companies.
Institutional Investors
The final reason why 2018 will be the best year for cryptocurrency is that this year is the first year for institutional money to flow into the ecosystem. It is estimated that as much as $ 10 billion - $ 12 billion has been flown into the cryptocurrency market, but that is nothing compared to the institutional funds that can be invested. The reason is, the first fund supports the market capitalization value to around $ 500 billion, $ 10 billion and the next can be $ 12 billion.
In short, it is likely that the five theories will not occur 100 percent. However, there is a probability of 70 to 75 percent. And each can grow the overall market size of 50 to 100 percent - maybe even 200 percent. If you combine these factors, the potential for a market increase can increase to seven or eight times the current level.
Even so, maybe the theory is not like what we saw in 2017, this is much higher in absolute terms. That could make 2018 the brightest year for cryptocurrency. In addition, growth may not be based on hype or hope because it will be on a solid foundation.
However, you should not think positively first, because you must consider a number of risks before investing your funds into the cryptocurrency market. If you ignore the risk of fear, or are unsure and doubtful (FUD), you can be blinded.