Any year-on-year graph on cryptocurrencies will show that the 2017 bull run is over. The frenzy has died down, and unless other speculative forces appear, we’re now looking at crypto as relatively stable. Pioneer investors have already been soured by current values, while new investors are hoping for another boom.
Cryptocurrency has become a household term in many regions, so any future rise in value should come from more tangible forces instead of frenzy or pure speculation. These can start a new upward trend.
1. Amazon accepts crypto as payment
The ripple effect should be immediate. Other e-commerce companies will follow suit. Currency prices will skyrocket. It is likely that Amazon will introduce a new currency and/or token-based app within its ecosystem, so Bitcoin etc. might lose out temporarily. But the market as a whole should trend upward.
2. Continuing adoption
Amazon creating its own currency will only encourage more stock markets and companies to take crypto more seriously and solve its longstanding issues. Right now, Bitcoin and other currencies are, in varying degrees, still hobbled by major structural limitations – transaction bandwidth/speed, security issues and platform integration. Market behemoths that invest more capital won’t be left behind. Again, it is more likely that Bitcoin will be challenged by these new technologies/currencies, but is unlikely to disappear. The increased adoption will more than makeup for the effects of watering down the system as a whole.
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3. Receding markets
A recession typically forces investors/institutions to move to gold, a traditional safe haven. Future trends might push them toward cryptocurrencies instead. The expected rise in demand will push prices higher, but investors should continue to buy “digital gold” in this scenario.
4. Institutionalizing stability
Widespread adoption of cryptocurrency has been slow because of its inherent volatility. That said, market acceptance is directly proportional to its acceptance as a legal instrument. It is no surprise then that the United States, Canada, EU states and Australia have high adoption rates because of its legal status in these regions. These countries have advised caution and appropriate risk management, but have otherwise allowed free investment and research.
Investors’ choice to buy in will ultimately depend on these factors. Current regulatory policies across global markets will likely stay unchanged. So for 2019, prospects remain mildly positive.