Cryptos are at it again – spiraling out of control with Bitcoin leading the way.
This time on the biggest downtrend seen since the BTC shot to almost $20,000 at the end of 2017 and it’s taking everyone in the crypto economy along for the ride as it slides down through the $3,200 twelve months later.
“Crypto is the mother or father of all scams and bubbles,” is the view of Nouriel Roubini the Professor of Economics and International Business at New York University Stern School of Business.
Ref: Nouriel Roubini: Bitcoin Is ‘mother Of All Scams,’ https://www.cnbc.com/2018/10/11/roubini-bitcoin-is-mother-of-all-scams.html (accessed December 18, 2018).
In an interview on Bloomberg Television, Roubini told the audience that the fate of cryptocurrencies is worse than “Tulip Mania” and he goes on to predict that the downward crash of Bitcoin will have a knock-on effect on the more than 1300 cryptocurrencies around the globe.
What is likely to happen in 2019?
Only one thing is sure; the crypto mess will affect millions of people!
According to a study published by Cambridge Centre for Alternative Finance, there are millions of users now in the crypto sphere, and despite the 2018 volatility, there are 139 million users worldwide, which is twice as many as 2017. However, the report guardedly points out that only 38% are active customers across a variety of crypto services.
The report gives one of the reasons for uptake in crypto usage as the increase in coins/tokens on offer, mainly due to the ERC – 20 giving a broader spectrum to the market. The report also pointed out that the emergence of the digital asset markets and the self-regulation by the SEC (USA) guidelines, has given the industry a “safety check” boost, meaning that more people trust what they are reading in the crypto press. This could also be due to the increase in employment within the crypto ecosystem, which has grown by 164% in the past year; the average number of staff per company is up from five members to 20 between 2016 and 2018.
Up until a year ago, the problems surrounding cryptos were scalability and security; $1.5 billion went missing previously. Crypto companies have thrown money at employing more people to stop hacking and improved, dedicated hardware to speed up transactions. At this point, no one can predict what 2019 holds, and the investment could be in vain if cryptos as traded assets fall off the planet!
Predictions for cryptocurrencies in 2019
Voyeuristic predictions are not science as has proven by some of the biggest names in the technology industry. Let’s take a look at what people are saying:
John McAfee, Bitcoin enthusiast and founder of McAfee Antivirus Software application, predicted BTC would reach a million dollars. A comment that has become infamous and we wait to see what he will to honor his pledge! Earlier this year McAfee, although not eating his words, stuck to his guns when asked how he makes a prediction on Bitcoin for the future.
“It’s very simple,” he said, “I’m a mathematician. As you run the numbers, the number of people using Bitcoin and the number of transactions, it’s escalating tremendously. That’s the true value. The true value is going to eventually be based upon usage and if you track the usage curve, a million dollars by the end of 2020 is conservative”.
Ref: www.cointelegraph.com: https://www.youtube.com/watch?v=2lbn1PgWV7I]
ETH has been holding its own in the recent downturn and the prediction that the crypto could reach $100 by the end of this year is not far off the mark. The current price is only $15 away, but crypto resistance in 2018 Q4 shows that the bears are still holding firm. However, long-term strategists are giving Ethereum thumbs up. Bitcoin.com CEO Roger Ver believes that the breakout is on the cards and that ETH could overtake Bitcoin. He also predicts Bitcoin Cash could do the same before 2020. Ref: https://www.investinblockchain.com/ethereum-price-predictions/
The long-term view for Ethereum is pretty convincing, so buying now and holding on for future increase in price seems to be the best advice for investors.
Ripple (XRP) & Stellar (XLM)
The announcement by Binance to add XRP and XLM to USD Coin pairs give both cryptos a fresh start going into 2019. Giving them equal billing on Binance is interesting, as these trading cousins do not share identical spots in their overall market indicators – XLM (Stellar Lumens) is currently trading at about 10 cents, and the XRP value is hovering just under 30 cents. Also, the 24-hour trading volume between the pair is at opposite ends of the spectrum with XRP over $300 million and XLM just making a dent at around $67 million.
There are more differences than similarities in that Ripple’s developers are focussing on being a bank-to-bank blockchain and Stellar have always insisted that they are “true blue” protocol for peer-to-peer payments.
Yoshitaka Kitao, CEO SBI Virtual Currencies has come out many times during 2018 telling his Twitter audience that he believes XRP will reach $10 by the end of the year. He is still a long way off the mark, but with this amount of hype, perhaps 2019 will see the crypto reach the target.
Whichever way you look at it, buying at 30cents and holding on for a year to make $10 is just good investment sense!
Meanwhile, Stellar has just got to 6th place in digital trading assets and gaining 4% in 24h period is not to be sneezed at when you are just starting out in a bear market.
Charlie Lee, the Litecoin founder, made two predictions in the past 12 months. He said that Litecoin would suffer at the bull run of last December, but that the crypto would recover. He also predicted that the coin would go as low as $20, which is not too far off their low mark of $23.30.
People are taking Lee seriously, and this has led to Litecoin overtaking BCH (Bitcoin Cash) by 12% in market capitalization recently; an event that is being called “the Flappening
There is always an arbitrage opportunity for anyone keen to take advantage of the “downside” in trading pairs. Recent buying Dogecoin on Koineks and quick sale over on HitBTC gave a cool profit of 1.4%. However, this may not be the case in even a few hours or days, given the hits to the market. This is not to say that it will become a shit coin and there is every good reason to hold on to DOGE for a while longer before flipping. The main reason to hold on is that DOGE is gaining popularity with more and more people buying up at the rock bottom price. This means that there will be room for maneuverer with others on the lower end of the market and the prediction that DOGE will become a stable coin during 2019 is good for the industry as a whole. In the latest news report from Cryptonewsz, all indications are that there is a bullish run on Dogecoin, albeit with small financial gains and large percentage swings – hence the belief that DOGE is good to buy and hold on to for a while.
What we do know from recent weeks is that there is money to be made trading cryptocurrencies in a bear market. Everything going on in the crypto markets suggests that there is room now for investors to “get long,” set automatic triggers (buy/sell) to leverage and protect capital.
Eric Ervin, CEO Blockforce Capital, believes that investors will have to keep in a wait and see mode at least for the first half of 2019, as we wait to find out if Bitcoin ETF gets clearance from the SEC.
I am guessing that everyone is in a wait and see mode heading into to the New Year.