Crytpo-currencies are here to stay but 2018 will not be the year for bullish gains. It will be the year of the development of Crypto. Despite the increasing number of technological developments or introduction of new exciting projects like Ethos, Debitum, Rchain, Universa, Quantstamp, or many others, the market will remain in a prolonged stalemate contained between the three and five hundred billion dollars market cap.
The market will not crash for a simple reason: it is a cradle of innovation. No matter how hard the banks or the media try to discredit Bitcoin and its ecosystem, the blinding potential of the technology behind it makes it impossible to ignore or discard. And all major governments understand this. Not to mention that its immense market cap of over $300 billion makes it impossible to disappear overnight.
on the other hand, investors will have to wait months if not years for the market to recover for two important reasons: the loss of public appeal and the slow development of new technology.
One of the major contributors to the recent rise in price was the influx of money from average investors. But public confidence and interest has decreased due to a lot of negativity surrounding hacking attacks, scandals, and regulations. Hack attacks on major exchanges have resulted in the losses of $670 million this year alone, and scandals like Bitconnect, Mt. Gox, and Monkey Capital make the crytpo-market look like a circus or as described by the US Congress, a complete mess; and worldwide crypto regulations give the impression that the market facilitates illegal activities.
In addition, companies struggle to develop their products while facing immense pressure from competition as well as technological challenges. Ripple’s advance into the cross-border currency transfer is being challenged by R3’s Corda project, Swift, OmiseGo, and PayPal’s new “Expedited Virtual Currency Transaction System.” The deployment of new crypto applications is also delayed by the limiting capabilities of the blockchain in transaction speeds and fees. Many projects like Ziliqa, Lisk, Neblio, and Bitcoin Lightning attempt to mitigate this problem, but most companies are choosing to bypass the blockchain for other less decentralized alternatives. This means investing additional time and money which makes for a longer recovery of the market.
The light at the end of the tunnel lays in the introduction of crypto-currencies as viable exchange traded funds (ETF) for Wall Street investors. This, combined with the regained confidence of the public will bring an influx of money that will formalize the status of crypto-currencies as an established, profitable market. Unfortunately, this is not going to happen until a minimal sense of stability is established either through regulations, insurance, and better security. And not until companies produce any kind of results in prototypes or initial versions of their products and services.