As Bitcoin slowly but steadily continues to lose value this month and with the rise of institutional investment in the space causing bulls to make predictions for the end of year prices that range from optimistic to seemingly delusional. Certainly no Bull The Motley Fool’s Sean Williams has made his own end of 2018 prediction list from which the following is abstracted.
Crypto Market Cap Will be Lower by Year’s End
The unstoppable crypto market in 2017 can be in part attributed to trading being done almost exclusively by retail traders who only saw profit on the upside which pushed the market cap higher and higher. As access to institutional investors has increased through the first months of 2018 and with both the CME and CBoE listing Bitcoin futures investors can now make money on both the upside and downside of the crypto market. This should result in a steady decline of the market cap Williams predicts. It’s not exactly going out on a limb to suggest that the total market cap isn’t going to get back over $830 billion in the next six months.
Bitcoin Will Lose Half of its Value
Williams writes that he predicted Bitcoin would fall by half at the beginning of the year when it was just over $14,000 and since it has twice dropped to nearly $6,000 and is currently at about $7,000. He feels confident that it will fall by half again. Unsure of what the X factor causing the price plunge will be he posits increased regulation in a major trading country, institutional investing, or even Bitcoin’s slow transaction speeds.
Bitcoin Will Briefly Lose its Top Position to Another Altcoin
Citing the emotional tendency of cryptocurrency traders, Williams writes that he will stick by his other new year prediction that another coin, most likely Ethereum, will bypass Bitcoin if only momentarily. With a $70 billion market cap difference between the two of them Ethereum has a long row to hoe but Williams refers to Ethereum Alliance’s 500 members and the network’s utility as assets that could push Ether to a brief number one spot.
The US Will Expand Cryptocurrency Regulation
This is a no brainer as the Department of Justice, Securities Exchange Commission and North American Securities Administrators Association have all been actively pursuing and punishing crypto and ICO related scams in the last month. In addition to this, Williams predicts that the Internal Revenue Service will increase regulation beyond ending the like-kind exchanges loophole and one of the federal regulatory bodies will increase transparency by forcing traders to verify bank accounts with exchanges, as already happening in South Korea.
A Bitcoin ETF Will Come to Market
The question of whether a Bitcoin elctrionic traded fund (ETF) would hit the market began as soon as the CBoE offered Bitcoin futures. The SEC waylaid it when it demanded answers to 31 questions that mostly dealt with custody. Williams assumes with increased regulation in the space the ETF will happen though which platform it will follow he isn’t willing to hazard a guess.
In summation Williams warns of the dangers inherent when investing in cryptocurrency writing that digital coins have no metrics that can be measured outside of transaction speed and daily trading percentages. That the backbone technology of all crypto projects, the blockchain as wonderful as it’s potential maybe, is untested in the real world of business. That in-spite of all the excitement surrounding the space he is going to leave his money safely on the side which may leave the reader thinking why write about the market at all if you have no skin in the game?