With all the recent media coverage, we have noticed an increasing number of enquiries from clients on Bitcoin and cryptocurrencies in general. While not something we are recommending at the moment, we are keeping a close watch on what is happening in this space.
The rise in Bitcoin prices in 2017 was nothing short of meteoric and created an investor and media frenzy. Bitcoin became a polarising topic of discussion between those desperate to speculate on an ever-increasing rise in Bitcoin value vs those who claimed it was nothing short of demonstrating a classic bubble mentality which in due course would come crashing down.
Bitcoin has not been immune to normal market corrections. Early 2018 saw Bitcoin lose a big chunk of value which led to further speculation on its future.
The price of Bitcoin in 12 months is anyone’s guess. It is unlikely to disappear and it is likely to carve out a niche in the rising cryptocurrency markets. As we move into 2018, there are a number of Bitcoin developments worth monitoring, not all of them having to do with just Bitcoins price. Here are some expert’s opinions on what might happen to Bitcoin in the coming year.
- Taxation will be a huge issue. Around the world, revenue agencies will be looking to tax those who have made massive gains through Bitcoin speculation.
- The number of cryptocurrency adopters will rise. No doubt there will be a rise in the number of people using cryptocurrencies. One commentator- Yonatan Sela from PROPS believes we will see within 12 months over 50 million users worldwide holding at least one cryptocurrency.
- Bitcoin develops into a payment network. Currently, Bitcoin is being used as a speculative asset and store of value but Trevor Koverko from Polymath believes we are going to see Bitcoin emerge as a full-fledged payment network within a couple of years.
- Investors will diversify their crypto assets. Most investors will become aware that besides Bitcoin, there is Ethereum, Litecoin, Dash and IOTA. Mark Lurie, CEO of Biddable says that for investors, there is going to be a strong move toward diversifying crypto-assets and managing investments the same way that investors look at more traditional assets and investing.
- Interest from institutional investors will increase. As Bitcoin and cryptocurrencies start to become more ‘mainstream’ and less volatile, it is likely institutional investors will start to take some serious interest and cautiously introduce it to some of their portfolios.
- Expect to see more regulation. In 2017, the FMA and a number of other regulators issued warnings about cryptocurrencies and the speculation frenzy which had developed around them. As Bitcoin and other cryptocurrencies become more widely known, regulators will take steps to protect the public by introducing regulations around the promotion and distribution of cryptocurrencies.
Give your Milestone adviser a call if you wish to talk more about Bitcoin and cryptocurrencies in general.