It has been a tremendous year with cryptocurrencies, where Bitcoin has dragged most of the attention with its incredible rise in value. Bitcoin started the year at just around $1000 until a sudden spike by the turn of may which had many believing the currency was in a bubble. This rise follows off course to increase of demand, however, the high returns that many investors were having created a “hype” for the cryptocurrency cause an extreme spike to a new all-time-high of $3000. With weeks of correction the price has reduced to $2530.59 (CoinMarketCap).
This summer has raised more attention to the crypto world and many whales and big time investors are starting to see the potential of the currencies through advances in technology and new ICOs.
Fundstrat’s Tom Lee is one of the first Wall Street strategists that has openly reviewed bitcoin. In a report titled, A framework for valuing bitcoin as a substitute for gold, Lee predicted that the price of bitcoin would reach $55,000 by the year 2022. “We believe one of the drivers [of bitcoin] is crypto-currencies are cannibalizing demand for gold,” Lee said in the report. “Based on this premise, we take a stab at establishing valuation framework for bitcoin. Based on our model, we estimate that bitcoin’s value per unit could be $20,000 to $55,000 by 2022.”
Unfortunately, no one can really predict the price of Bitcoin, let alone the price of any crypto currency just basing it off of its previous accomplishments. Even the great British economist, John Maynard Keynes, wrote: “It is dangerous…to apply to the future inductive arguments based on past experience, unless one can distinguish the broad reasons why past experience was what it was.” However, we cannot say that it is impossible, for Bitcoin to reach such heights it has many applications it needs to address in its development.
August 1st Bitcoin Hard Fork
To many in the crypto world, this date is a very important one as it addresses the scaling issues in Bitcoin (BTC). Starting August 1st, nodes that will enforce the user activated soft fork (UASF) BIP 148 will reject blocks from miners that do not show SegWit readiness. The SegWit2x program is said to help avoid a continuous network split. However, to some, speculation has created rumors of a potential second bitcoin that could arise just like how Ethereum (ETH) split with Ethereum Classic (ETC). This could result in a potential hard fork in BTC.
The activation of SegWit2x was created also to solve many occurring issues with BTC transactions such as speed. With the new version software users can expect an increased 2MB block-size parameter.
Due to this news, some investors have looked towards placing their share holdings in other alt coins such as Litecoin, Ethereum, and Ripple. But investors should still take caution as alt coins tend to follow the path that Bitcoin takes in the market. For example, if the price were to sudden drop to $1800, then the alt coins will take a sudden downturn as well and vice versa.
What to expect in the future of crypto world?
The main thing that excites developers and investors alike is the scope of cryptocurrencies. This year so for has been a major advancement in the technology and different applications cryptos can have to our world.
There has been an increased interest in the Eastern world on crypto currencies with China leading in its exploration. The recent crypto Antshares has many calling it the “Ethereum of China”, while Litecoin in the west and some other parts of the world have many turning their heads thinking it could surpass Bitcoin being that it already has a faster transaction speed. All we can say for now is that we are definitely in the most exciting part of the timeline for cryptocurrencies.
Author – Afolabi Thomas