2017 was the year of Bitcoin. The cryptocurrency saw tremendous growth last year—soaring from a price of $778 in January 2017 to over $17,000 by mid-December.
It’s also the year that Bitcoin grew to enormous heights of both popularity and speculation.
What will 2018 hold for Bitcoin? Below, we look at some expert predictions. But first, you might be asking, “What is Bitcoin, anyway?”
The Internet’s Version Of Money
Bitcoin is a cryptocurrency, or rather, the Internet’s version of money. It is a decentralized currency, meaning it’s not controlled or regulated by any government, treasury or bank. Bitcoins are created by people through “mining:” a process of solving complex strings of mathematical equations using advanced computers running Bitcoin software around the globe.
In addition to 2018 becoming the year that Bitcoin becomes a household name, here are six other predictions for the coming year:
With more and more investors making millions (and billions) from Bitcoin, expect the IRS to crack down on reporting gains.
2. More People Will Use Cryptocurrencies
Bitcoin isn’t the only cryptocurrency that exists, but its popularity has put the idea of cryptocurrencies on the map. By the end of this year, it’s expected that 50 million people worldwide will hold at least one cryptocurrency.
3. Bitcoin Becomes A Payment Network
If 2017 was the year that Bitcoin users hoarded Bitcoins like gold, then 2018 might be the year we see users actually using the digital currency to pay for things—like a cup of coffee. However, everyday transactions like this aren’t currently supported by the Bitcoin network and one “fix” to come along is called the Lightning Network, which would increase Bitcoin’s transaction capacity. Just last month, developers working on the Lightning Network announced groundbreaking progress.
4. Investors Will Diverse
As Bitcoin becomes more mainstream, so do other cryptocurrencies. In 2018, experts predict that investors will diversify their crypto-assets and treat these investments more and more like traditional forms of investing. In addition to Bitcoin, investors will invest in other currencies such as Ethereum, Litecoin, Dash and IOTA.
5. Institutional Investors Will Enter The Industry
In 2017, Bitcoin matured to the point that institutional investors began to feel confident about getting involved. According to Ville Oehman, fund manager at Helvetic Investments, “If you look back 12 months, the market cap of Bitcoin and cryptocurrency was $25 billion. Now we are close to $400 billion and we are talking about a completely different picture. It’s really been a market where the products available haven’t been geared towards institutional investors, but now we are starting to move towards that.”
6. More Regulation
With Bitcoin prices and popularity continuing to increase in 2018, regulation is sure to become a major element of this space. Just last month, the U.S. Securities and Exchange Commission warned investors that trading and public offerings in cryptocurrencies may be in violation of federal securities law. It’s still unclear whether more regulation will have a positive or negative impact on cryptocurrencies in general.
The Bitcoin Scams
One other thing we can predict is that, as Bitcoin continues to grow in price and popularity, so will Bitcoin scams. From fake Bitcoin wallets to Bitcoin Ponzi schemes, cybercriminals thrive off tricking would-be investors. As these scams are likely to continue through 2018, be sure to check out our blog, As Bitcoin Skyrockets, So Do Bitcoin Scams, for some tips on how to spot these scams.
Whether you were an early investor of Bitcoin, or you’re interested in jumping aboard, it’s a good idea to stay current with where the cryptocurrency is headed. If 2018 is anything like 2017, it should be an exciting year in the world of Bitcoin.