Many economics theorists and finance analysts saw it coming. “A soap bubble,” some said; “An illusion created by supply and demand,” said others. What is true is that Bitcoin managed to position itself in 2017 as the first cryptocurrency to achieve high status online and in real life. However, and this is a fact, Bitcoin has lowered its value in the market, but this does not mean that it has failed. Moreover, while some argue that Bitcoin will fall precipitously in this 2018, others have pointed out that in 2018, although Bitcoin will fall in terms of its market value, at least it will manage to stabilize and set a beneficial exchange rate that It will allow it to be used in more markets, areas and ways.
There is no doubt that Bitcoin is topical. Throughout this year the price of the most used virtual currency in the world has been noted a revaluation of almost 300%. At the end of 2016 the currency was priced at $ 968. Today the currency is quoted at $ 4,000 per unit. The total capitalization of the currency at current market prices reaches the figure of 67,800 million dollars. Of course, before these figures, Bitcoin has long left the field of technology experts to become the center of all eyes. Investment bankers, regulators, financial experts are talking today, for better or worse, about Bitcoin and wondering what their role will be in 2018.
When Bitcoin was born in 2009, its price was only a few cents. In those moments the blockchain technology was completely unknown, nobody saw value in it and, therefore, the price of Bitcoin reflected this ignorance. From that moment until today, the community of users of blockchain and, therefore, of Bitcoins, has grown steadily. This growth is reflected in the number of wallets (digital wallets to deposit Bitcoins) that have been created since the birth of the currency. Only in the year 2017 the number of these digital portfolios has gone from 10 to 17 million. These figures show the strength of the global demand for Bitcoins, which has a direct reflection on the increase in the price.
This fact is particularly important in the case of cryptocurrency. Unlike any other traditional currency there is no monetary or commercial policy behind, nor is there a productive model of a country that strengthens or weakens the currency. On the other hand, the Bitcoin price is only pushed by the demand since its supply, on the other hand, is limited.
The increase in demand for Bitcoin is also reflected in the number of exchange platforms, Exchange, which are currently operating. However, for the qualified investor, the fact that these platforms do not have an adequate regulation can suppose a brake by the distrust that generates the operation of the same.
However, this investor has the alternative of operating through differences contracts or CFDs that, in addition, have the advantage of allowing leveraged operations. The operation with these instruments allows a good diversification of the risk since the Bitcoin presents a low correlation with other financial assets. These reasons make CFDs one of the ideal financial instruments to operate with Bitcoin.
While it is true that the volatility in the price may cause certain distrust in relation to the future performance of Bitcoin, while its community of users, the real source of strength of the currency, continues to rise, the cryptocurrency will continue to consolidate. Everything seems to indicate that this is the way it is going to be, so, undoubtedly, the year 2018 will be a key year for the future of Bitcoin on its way to configure an alternative to the current monetary system.
As these new financial products become more popular, their effect on market trends will be more pronounced. Even traditional stock markets experience high levels of volatility due to these scheduled events. This type of volatility will have a greater magnitude in the world of cryptocurrencies when futures and other derivatives expire or must be liquidated.
It could happen that, at some point, many users of cryptocurrencies want to sell their tokens and convert them into legal tender money. And that’s where the exchanges that have this responsibility could have a bottleneck to meet the demand of their customers. Many have limited these operations to $ 100,000 per month. So the relatively easy feeling at the moment of exchanging crypts for money could be damaged.
What comes easy, easy goes, says the saying. Many users in cryptocurrencies have made large gains in tokens with little market depth and very illiquid. Many of these currencies are traded in small exchanges, with limited capacities. It is possible that a severe correction will come and that sellers will not find buyers will produce a huge correction in the price that could drag other altcoins to the same drift. To deal with a loss of, say, 85% steel nerves will be needed, as well as to re-invest and reposition positions.
Regardless of whether any of these predictions come true or not, it seems that 2018 will be another vibrant year for the crypto universe, still very young and embryonic, global, fast-paced and working 24 hours a day, 7 days a week.