Market Report

Will Bitcoin rebound and restore its strength?




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Cryptocurrencies are at their worst point in history. The entire cryptocurrency market has lost over 80% of its market capitalization value. Bitcoin, the first and leading cryptocurrency, has lost over 60% of its value from its all-time high back in 2017. 2018 is almost coming to an end and there seems to be no respite in sight.

So, what does 2019 hold for Bitcoin and the cryptocurrency markets in general? Will Bitcoin rebound or will it fall lower and lower to nothingness. Here is the verdict based on experts’ insights.

It will get worse before it gets better

The cryptocurrency market has been on a downfall since the beginning of 2018. Prices seemed to have stopped at the USD 6’000 range several months ago leading analysts to speculate that that was the support. However, prices have fallen even lower since, and some analysts predict that they will go even lower.

Bitcoin prices are currently ranging between USD 4’000 and USD 4’500, but this is not the new support. Several analysts including Arthur Hayes speculate that prices will fall even lower to hit the USD 2’000 mark before the ongoing bear market loses its strength and backtracks. Some analysts, however, have lost all confidence and concluded that this is the end of the road for Bitcoin and cryptocurrencies in general.

Prices will rebound, eventually

The coming year doesn’t look promising for Bitcoin and the cryptocurrency markets. As mentioned, some trusted analysts predict that prices may go as low as USD 2’000. This will take some time considering that the current support level is stronger than the previous USD 6’000 mark. However, the winning verdict in the whole debate is that Bitcoin prices will rebound eventually. Several factors have been pointed out in support of this argument.

Regulators are bringing credibility back

The lack of regulation in cryptocurrency markets has done more harm than good for legitimate cryptocurrencies such as Bitcoin and Ether. Thousands of cryptocurrencies have sprung up since Bitcoin came to the limelight, but the majority of them are either futile or outright fraudulent. Many people have lost a lot of money investing in such cryptocurrencies especially in initial coin investments, and these losses have made them lose confidence in the entire cryptocurrency market, including in Bitcoin.

This, however, is about to change as authorities all over the world are taking measures to regulate cryptocurrencies. The U.S. Securities and Exchange Commission, for instance, is calling on international financial institutions to cooperate in a bid to crack down on the misuse of cryptocurrencies. The commission has also fined several American figures including DJ Khaled and Floyd Mayweather for promoting fraudulent ICOs. Canada is also doing the same – the Financial Industry Regulatory Authority, in partnership with Canadian authorities, recently charged a Canadian citizen with a financial crime for running an ICO that collected millions of dollars from investors all over the world, including the United States.

The involvement of authorities and regulators may compromise some of the desirable features of cryptocurrencies, but that would be better than watching scammers flood and ruin the markets. This, in turn, will raise confidence among legitimate investors and bring stability and consistency in the crypto markets.

Institutional investors are making inroads

Say what you will about institutional investors but you can always be sure that they cannot undertake anything unless they are sure it will be profitable. Some time back, major banks around the world banned their employees from trading Bitcoin citing that it was all a scam. Now major banks including Goldman Sachs are exploiting various ways to profit from the cryptocurrency.

The establishment of a Bitcoin Exchange Traded Fund (ETF) would be a great confidence boost for the cryptocurrency. The idea does not seem far-fetched considering several respectable institutions have been advocating for it, and the SEC seems to be listening.

The Chicago Board of Exchange (CBOE) has received two requests for the establishment of a Bitcoin ETF: one from New York-based VanEck and another from SolidX, a reputable Blockchain platform. The Intercontinental Exchange, the New York Stock Exchange’s parent company, is also developing plans to launch a Bitcoin-based ETF come 2019. It is also partnering with global brands such as Microsoft, Starbucks, and the Boston Consulting Group to set up a cryptocurrency exchange platform with a focus on Bitcoin – the upcoming exchange platform will be known as Bakkt.

Citigroup and NASDAQ have also been making inroads in the cryptocurrency markets. Citigroup, for instance, is now running a cryptocurrency custody service that mostly targets Bitcoin users. The bank is also finalizing plans to launch a Digital Asset Receipt (DAR) designed to improve speed and boost security for institutional investors seeking to safely invest in Bitcoin and other cryptocurrencies. NASDAQ, on the other hand, is building an analysis tool designed to help investors make better decisions on their Bitcoin and crypto investments.

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The concept of cryptocurrencies if fully established and Bitcoin is the ideal cryptocurrency

Cryptocurrencies have come too far to stop now – some of them, at least. The cryptocurrency market is worth billions of dollars. What’s more, certain cryptocurrencies including Bitcoin have become an acceptable means of payments by many global brands and small merchants across the world. What’s more, many underdeveloped regions around the world are turning to cryptocurrencies, and some countries such as Venezuela are even launching their own state-backed cryptocurrencies.

Altcoins are dead

As mentioned earlier, thousands of coins have launched since Bitcoin became popular. Some of these coins are indeed legitimate, but they do not come anywhere close to Bitcoin in terms of popularity, value, credibility, and so much more.

Alternative coins (altcoins) have been the hardest hit by the ongoing bear market. Some have been completely wiped off the charts, and others risk facing the same fate. Bitcoin, in spite of still holding significant value, has lost confidence among most investors – how much more altcoins are trading for cents? To this end, several analysts believe that most altcoins are dead and that it is only a matter of time before they cease to exist. However, Bitcoin will not be the only cryptocurrency calling the shots – there are great prospects for Ethereum and several other security and private tokens.

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