The bullish Bitcoin predictions for 2018 may have fallen rather flat with Bitcoin standing at USD 3,870 at press time, but many experts insist 2019 will be the year institutional investors enter the space and prompt for far better performance.
Barry Silbert: “In 2019 it will not just be easy to get involved, but socially acceptable”
The so-called ‘King of crypto’ and founder of NASDAQ Private Market, Barry Silbert, believes 2019 will be the year Bitcoin really makes it into mainstream finance. He told CNBC that 56% of funds raised through his digital currency investment fund Grayscale came from institutional investors, meanwhile, a year or two ago, their involvement was almost non-existent. While he acknowledged that there was still a need for institutional-grade custody solutions, he firmly trusts that hedge funds are eagerly looking to get involved in the cryptocurrency market early, but want to be second, not first and not late into the game.
Silbert’s fund management firm has a stake in the top five cryptocurrencies, the rest he says, ”are going to zero” next year or soon after.
Mike Novogratz: “Q1 will bring new highs”
Never one to shy away from a bold cryptocurrency prediction, seasoned investor Mike Novogratz sees the first quarter of 2019 bringing Bitcoin’s price to “new highs,” thanks to the same institutional investors. The bitcoin bull retracted his prediction of a USD 10,000 end of year value, instead, he said that everything in the cryptocurrency space is taking “longer than expected.”
Novogratz trusts that Goldman Sachs’ crypto custody solutions currently in the works, as well as Fidelity Investment’s announcement of a “world-class custody solution,” will be enough to convince the investor class into the market early next year.
Tom Lee: “2019 will end somewhere between $20,000 – $64,000”
Just last month, standing by a now near impossible USD 15,000 2018 year-end price prediction, head of research at Fundstrat Tom Lee sees Bitcoin mining as being the biggest proponent of an expected price increase. “We believe the current path of hash power growth supports a BTC price of about $36,000 by the 2019 year end, with a $20,000 – $64,000 range,” Fundstrat shared in May this year.
Mining was expected to influence the price in this way, particularly due to the next generation of hardware rig that could extend hash power growth. However, 2018’s bear market has had a significant negative impact on the mining industry with reports suggesting that miners are struggling to break even in recent times. The Bitcoin hash rate has now finally succeeded in climbing once again after a four-month downturn.
AT Kearney: “It’s not dead, it’s post-crash”
Management consultancy group AT Kearney released its 2019 price prediction, defending Bitcoin against claims that it is trending to zero and the whole cryptocurrency market to be “post-crash.” The report labels Bitcoin as an asset that is still maturing, although, it will “lead the consolidation and maturation” of altcoins.
The approval of a Bitcoin exchange-traded fund (ETF) by the US Securities and Exchange Commission and a general improvement to market transparency were cited as factors that will propel the value of Bitcoin, while AT Kearney says there is only one path to survival which involves “acceptance by the international financial system that Bitcoin once sought to defeat.” With this in mind, AT Kearney predicts 2019 will see the Blockchain Association lobby in favor of cryptocurrency in US politics.
The consultancy additionally predicted Bitcoin to reclaim close to two-thirds of cryptocurrency market capitalization even by the end of 2019, sensing a growing aversion to altcoins by investors created by an increased perception of risk. Bitcoin’s current market capitalization stands just over 50%, after recovering from a loss in January 2018 that saw it fall to just 33%.
Stablecoins may become real competition
With Bitcoin’s market performance this year disappointing many investors, its market fluctuations have prompted many cryptocurrency enthusiasts to look into alternative store-of-value opportunities. Particularly, operations reliant on Bitcoin for their business model have faced recent economic hardships. The trending option of stablecoins can theoretically be used as a way to preserve funds in a far more ‘stable’ way without having to cash out into a strong fiat currency. For example, the largest stablecoin by market cap, Tether (USDT), claims to hold an equivalent value of the USD.
Head of research at Blockchain.com and co-founder of Mosaic, Dr. Garrick Hileman, in November said that stablecoins have become the fastest growing category in the blockchain ecosystem since the rise of interest in distributed ledger technology (DLT) in 2015. His analysis is largely based on the enormous levels of venture funding the crypto-asset category has raised, currently standing at over USD 50 million, a total that surpasses all other categories.
Stablecoins became more prominent in the latter half of this year and, as the technology behind them is still being finetuned, the impact they will have on cryptocurrency market is still unclear. If a large enough percentage of Bitcoin-reliant business models or investors choose to switch to stablecoins for a perceived improvement of economic stability, this could prove to be a struggle for Bitcoin’s performance in 2019.
Can the price even be predicted?
Some pundits are happy to throw around numerical guesses of where Bitcoin will find itself next year, but others are more cautious in doing so, especially with the failings of nearly all predictions in 2018.
Lisa Cheng, the founder of the Vanbex Group thinks that the lack of cryptocurrency fundamentals ultimately lead to unsophisticated analyzers who are responsible for bad predictions. Additionally, she has pointed out that the early Bitcoin investors still account for a large share of the market and have incentives to swing the price by publicizing forecasts, as do others who are betting long or short on the value.
While it is difficult to put a price on Bitcoin for the coming year, there are certain things that can be assumed to play out and effect adoption, such as institutional involvement, stablecoins, and a greater understanding of cryptocurrency fundamentals as the market matures.
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