It seems as if bitcoin is on the rise once more. As its underlying market is virtually inscrutable—billions of dollars shuttle between traders in the black market—there is one fundamental change on the horizon. Besides, it has been sliding among a lack of capital inflows, raising interrogations about the future for them in the long-term.
The researchers have recorded “unusual” moves in the bitcoin futures market, with premium rates rising even as bitcoin prices fall—suggesting the bitcoin price could be headed higher next year.
Despite its recent sell-off, many bitcoin and cryptocurrency market watchers are feeling good about next year—bitcoin and crypto heavyweights have been predicting a sudden price surge, technical data is looking positive, and recent developments suggest that this could be a big year for bitcoin.
However, the looming bitcoin halving event, set for May next year, will see the number of bitcoins rewarded to miners cut by half and some expects this to boost the bitcoin price—though others disagree.
The outlook for bitcoin is the subject of both sides debating on its future existence. Even though the financial media is proliferated by so-called crypto evangelists, the “overwhelming sentiment” among crypto advocates is that the total market capitalization could explode over the next five years.
The historic volatility of the asset class is no reason to get worked up and panic. Still, the optimism of the crypto evangelist view of bitcoin as digital gold, calling it cluttered; stating its long-term value is more likely to be $100 than $100,000.
Unlike physical gold, bitcoin’s use is limited to transactions, which makes it more fragile to a bubble-like collapse. Although, the cryptocurrency’s energy-intensive verification process is vastly less efficient than systems that rely on a trusted central authority like a central bank.
It’s a long way to go before bitcoin becomes a globally accepted form of currency, virtual or not, with some counties having outright banned the use of bitcoin. Though the number of countries is diminishing, with the wider issue being the lack of regulation. Bitcoin itself coupled with concerns over technology limitations.
The technological development over the short to medium-term will certainly influence the value of the markets and, as a global regulatory landscape develops. In addition to this, we would expect the usage and demand to increase, driving the value, the types of returns that are not apparent with cash, still currently maintaining its cash is king status.
Advantages of using Bitcoins
- Greater Liquidity Relative to Other Cryptocurrencies
Being the most popular cryptocurrency by a significant margin, it has far greater liquidity than its peers. In contrast, most other cryptocurrencies either can’t be exchanged directly for fiat currencies or lose substantial value during such exchanges.
- Increasingly Wide Acceptance as a Payment Method
Hundreds of merchants accept bitcoin payments. If you’re someone that’s being serious about reducing your exposure to fiat currencies, bitcoin’s growing mainstream acceptance is likely to be a big help.
So, what’s next for Bitcoin? As we talked about these coins previously, it has many strong advantages and for this reason, it will remain an appropriate strategy as a currency. A large majority of BTC transactions are made in China in high volume so the two will remain interlinked.
However, we see the biggest problem and risk to bitcoin being its substitution and/or parallel use by other cryptocurrencies taking its position. Die-hard fans of bitcoins claim that this is never going to be a problem since it was the pioneer and the leader from where it all started and as such enjoys first-mover privilege.
The argument is probably flawed because although the BTC is used for payments, there is only a relatively small percentage of all bitcoins. The main primary use of bitcoin is being a store of value and for this reason, other cryptocurrencies can always step in and enjoy similar status if aggregate demand requires it.
We can’t be sure if these coins will work or not on our mere predictions or not. Since they have their market share and lots of people are investing in bitcoins to be secure in the future since they believe in this sort of crypto payment method. The market share is gradually increasing however it’s hard to judge the graph because there will be a lot of differences and fluctuation.
The real question, however, is that can we be sure about bitcoins being back in the market? Even after all of this, is bitcoin simply the 21st-century version of gold, only without the storage issues?
Will it be just a short-lived popular fad that may soon evolve into something quite different? Only time will tell. The only certainty for this currency is that its price will remain very buoyant in the future. …