7 Reasons The Cryptocurrency Market Could Take 500% Next Year
This year, the sector has experienced unprecedented growth. In December 2016, at the same time, the total market was around 40 billion dollars and involved less than 5 million people (engineers, entrepreneurs, journalists and buyers). Today, it is a market of more than 500 billion dollars which involves more than 50 million people. It will increase by 500% in 2018. Here is why, in 7 reasons:
I) Blockchain is like freedom of speech. We can’t stop it.
Blockchain is the distributed trust network the internet has always needed, and no one can stop it. Why? Because it’s made up of nothing but code, and code is literally a language. You cannot prevent someone from speaking or writing their thoughts on their computer. To stop the Blockchain, you need to stop people from coding, which means banning their free speech. The country that did this would be one of the most totalitarian regimes we have ever had.
Bitcoin is the real Occupy Wall Street.
– Julian Assange? (@JulianAssange) Dec. 15, 2017
(II) The adoption rate still low.
Assuming that there are nearly 4 billion adults connected to the Internet and 50 million accounts created on the various exchange platforms to date (Coinbase, Bitfinex, Poloniex, Kraken…). This would mean that we are currently at a consumer adoption rate of less than 2%. The biggest exchanges are experiencing huge growth, opening thousands of new accounts per day. The network effect is getting more and more powerful and the average dollar amount per user is also increasing, because slowly but surely people are investing more and more in it.
(III) The scarcity of Bitcoin.
A Bitcoin is worth around $ 18,000 today. The road to + $ 100,000 in unit value will be hectic, but we are on the way. It might sound crazy, but 20 years ago, however, 99.9% of the population would have called you crazy if you had predicted that assurance.com could someday be worth $ 35 million. Or that PrivateJet.com could be worth $ 20 million. Well, it is today. Why? Due to the scarcity of these nominal assets. It’s the same for Bitcoin. The finite number (21million) plus the increasing demand will only further increase the unit price.
(IV) People slowly realize …
That, since Bitcoin’s value is not tied to other assets (gold, dollars, real estate), it is not correlated with people and infrastructure that sometimes don’t really know what they are doing. You can also think of it this way: $ 1,000 of your wealth stored in Bitcoin is $ 1,000 of wealth protected from censorship, foreclosure and other confiscation. It is a strong store of value against autocratic regimes, and against the banking infrastructure as we know it, because it is corrosive to the world. It is not normal that central banks can print currencies endlessly when they need it. It is not normal that countries like Zimbabwe have a currency so depreciated that they have to print and use 100 trillion bills…
(V) Tulip Mania, Gold Rush… How about service?
Twenty years ago, the dot-com bubble was supposed to be even worse than 17th century tulip mania. And indeed the bubble has burst and the correction has taken place, but today like the vast majority of my friends, I spend at least 50% of my day online, I can get whatever I want by tapping on a button and spend a few thousand dollars a month on the Internet. Why? Because the Internet bubble created products and services that we use today, natively in our lives. In the meantime, I don’t buy or wear gold, and I hardly know the color and smell of a tulip. The Internet is helpful. Blockchain will be useful. The tulip was not.
(VI) Unprecedented ‘accessibility’ to this market is hard to ignore
In 2000, the web bubble was estimated to be worth around $ 1.7 trillion before it burst (in US, accredited investors only). Today, the crypto market is 4x smaller, and anyone can buy it anywhere in the world, as long as you have access to the internet. When you see and listen to 15-year-olds who have Ethereum in their Coinbase account, I tell myself that this “bubble” just keeps growing. Of course, there will be winners and losers, as at least 90% of the companies / tokens that make up the crypto landscape will disappear in the next few years. But what is certain is that the blockchain, by its value and its disruptive quality, will not disappear. In the near future, the first products will be ready to be marketed. Soon no one will be talking about the bubble. It’s just a matter of time.
(VII) Great players are coming.
Some on Wall Street are realizing that a few small crypto hedge funds are making incredible returns. Indeed, when you hear that the best-in-class achieve over 400% to over 600% growth per year, traditional hedge funds are getting a bit dated. As a result, billions of dollars will trickle down from Wall Street into the crypto market over the next few months. The big financial institutions that have rejected Bitcoin for years are slowly starting to take the wave. I bet they will soon, if they haven’t already, invest in it. (Hi Jamie).
Fasten your seat belt, the party has only just begun …
This text is not investment advice. Note that, in addition to being a very volatile market, the crypto space is 90% filled with companies / tokens / coins likely to disappear in the years to come. If you want to invest time and money in this market, do your own research.
Cyril Paglino is the co-founder of Tribe.