The author Julian Hawes, co-founder and president of TenX - a company that is working on a solution to simplify the calculation procedure cryptocurrency. He recently published a book «Cryptocurrencies Simply Explained».
In an earlier article I explained to CNBC why the potential "bubble" may burst cryptocurrency in 2018. Many people have asked me: "If I am so skeptical about virtual currencies, why invest in them?"
Let me explain. I always calculate the potential pros and cons, and I think that many people take unnecessary risks: either they invest too much or too little because they do not carry out a proper analysis.
Therefore, I want to highlight five reasons why 2018 may be the best year for cryptocurrency, and why I invest in them.
1. Timing of transactions and their value
Bitcoin (BTC) is the most important cryptocurrency. Most of the money supported by the Government, which are applied to the crypto-market and out of it, go through Bitcoin. Therefore, everything that comes with it, affects the market as a whole.
Market domination token was approximately 40% as of Wednesday. In my estimation, it is obvious that the dominance of the Bitcoin market should again reach 75%. In fact, I see the potential Bitcoins growth of 150% in 2018.
Why? BTC is still dominant. Bitcoin has the largest user base. However, in cryptocurrency there are two problems: the time of the transactions and their value.
Bitcoin also can not handle more than 6 or 7 transactions per second. Compare this to the credit card on which there are thousands of transactions per second. Therefore, the criticism of the ability of Bitcoins become useful on a wider scale is clear.
The inability of the network to withstand heavy loads has led to the fact that the Commission for sending payment in 2017 increased more than 23-fold, to nearly $ 4.5.
Make life easier for users of the network technology designed to instant payments with near-zero commission - Lightning Network. It is a technology that allows you to transform any cryptocurrency in a fast and reliable means of payment with a minimum commission.
So it is safe to say that the second-level network Bitcoin solve problems - use of scale and lack of liquidity. This may be a key reason that the virtual currency is waiting for a splash this year.
Also interesting: one Bitcoin Mining in South Korea worth $ 26,000 and only $ 530 in Venezuela
2. Large-scale and more legitimate ICOs
Like last year, the initial proposal of coins (ICOs) will affect ethereum network because ICOS usually require a lot of air. This will support demand for digital currency. More legitimate ICOs will lead to increased interest in the airwaves.
This means that by the end of the year we will see growth in the market capitalization ethereum to $ 200 billion to less than $ 90 billion as of Wednesday. Cryptocurrency price could double to $ 2,000.
Despite the fact that on other platforms, you can see similar traffic, I think, will be the main direction of the air.
Many believe that the regulation restricts the markets, but it is short-sighted perspective. Ultimately, companies need rules for legal stability and confidence. The regulation gives consumers and institutional clients confidence in the investment.
We saw something similar when Japan began to regulate Bitcoin. First, the market fell, but in the end, he grew up. The same is observed in Australia.
4. Ease of use
There are a number of startups that offer debit cards that people can with relative ease to spend their reserves cryptocurrency. This means that the number of users and vendors will rise sharply in 2018.
Yes, most startups end my way failure, but the impressive successes of companies such as Facebook and Airbnb, help to hide this kind of failure. Thus, the success stories of several objects of the market cryptocurrency overshadow the negative news about bankruptcies.
5. Institutional Investors
The last reason that 2018 will be a stellar first year for virtual currency, is that this will be the first year of significant institutional investments in the ecosystem.
It is estimated that so far in the crypto-market came from $ 10 to $ 12 billion, but it is nothing compared to the investment funds. It is these funds have pushed the market to the level of $ 500 billion. The following $ 10-12 billion, which are minuscule for some funds, could double its market capitalization this year.
In conclusion we can say that the probability that all five factors are realized - is not 100%. But I still see the likelihood of 70 to 75%. Each of these factors can lead to an increase in the overall size of the market by 50-100%. Perhaps even 200%.
If you combine these factors, the potential growth of the market could rise to 7 or 8 times compared with current levels. This can make 2018 the most successful year for virtual currency.
Based on materials WELTRADE