As bitcoin prices consolidated at the US$13,000 range, many pundits are now predicting that it may fall to US$5,000 or rise to US$20,000. The truth is no one really knows where it is heading – anyone knowing it for sure would have already put a huge bet with their own money.
Although what is true is the trading volume and market capitalisation of alternative coins have surpassed 60% of total market capitalisation of all cryptocurrencies. Just beginning of 2017, Bitcoin was the most dominant around around 60-70%.
Alternative coins (or altcoins) leading the pack include Ripple which gained from US$0.25 to US$2.50 in a matter of less than 2 weeks. Many others have also seen at least a 3-8x gain in price. Most of the trading volume is believed to be coming from South Korean and Japanese markets as investors experience FOMO (Fear of missing out).
Central banks may start to take up bitcoin
Governments around the world already have bitcoin in their holdings – Bulgarian government holding as much as 200,000 bitcoins (valued at almost US$3 billion) confiscated from criminals. Perhaps there are countless other governments who plan to balance their central banking holdings with not only gold but cryptocurrencies.
When this happens, bitcoin prices will see a huge spike as governments around the world bid-up the prices for an asset which is limited in quantity. Bitcoin futures are already a reality, and North Korea has also been seen active (since 2013) stealing, mining and transacting in bitcoins in order to escape international sanctions. We gather it would not be too unusual to see any country picking up some bitcoins this year.
More sovereign nations issuing their own cryptos
There are many cash-strapped nations, and even more nations who suffer economic sanctions. The race to unpeg their commodities from the US Dollar has already been done, in favor of the Chinese Yuan. What is to stop them from doing the same with cryptocurrencies?
Crisis-stricken Venezuela plans on issuing the petro which is backed by its oil, and Russia is studying to issue the ruble coin. If all goes according to plan, this will be good for the overall cryptocurrency ecosystem as the public grow to accept the use of digital currencies, backed by governments.
In addition, governments who rush to make their currencies convertible to Bitcoin and vice-versa would see huge boon for their economy as crypto millionaires look to establish their base in economies that welcome them and their money. Who will be the first? We will have to stay tune and find out in 2018!
Other cryptos seeking to unseat bitcoin with better technology
There is little doubt that there are indeed better technologies out there today that can unseat bitcoin. However, it is also worth noting that bitcoin is the first to the market and has therefore built acceptance over a long time. While bitcoin today might be slow and expensive to transact, the social acceptance cannot be looked down upon. If better technology had always won, then the electric car should have been the preferred mode of transportation versus the petrol-engine car in the early 1900s. History has proven that was not the case.
However, this does not mean that you should not seek to invest in new technologies. Invest early, and invest wisely.
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