More than nine years have passed since the white paper signed by Satoshi Nakamoto appeared online describing the way bitcoin network should operate and generate value. Just a few weeks ago, CME Group, one of the biggest financial firms in the US launched their regulated futures market for bitcoin.
This key moment in the history of the network was celebrated by many and for most of them, it was a clear sign that the future looks bright for BTC. All of this was even more pronounced by the fact that it took place in 2017, a year that has been incredible for bitcoin. In this 12 months, practically all signs and metrics measuring adoption were in the green.
These included numbers of exchange users, social media activity, search trends, wallet downloads, transactions per day, trading volumes and maybe most importantly, ever-rising market cap. Naturally, the price of the bitcoin token moved in a similar direction, allowing the network’s financial aspect to reach more people and companies than ever before.
Yet, just behind the spotlight, there is a series of potential concerns that could weigh down the network in the upcoming year. Here is an overview of the state of bitcoin network right now and the events that could shape it in 2018.
Behind the good news of 2017, a series of endemic problems refused to go away. Many platforms designed for trading, including really big ones and regional leaders in China and elsewhere struggled to stay operational around the clock. The same problem appeared even with the CBOE website that went down just after the launch of the BTC futures market.
In most cases, things like DDOS attacks and other malicious influences were not to blame. Instead, simple volume of organic traffic was enough to put down the exchanges. Thanks to this overall interest, the futures markets are already embedding BTC into the traditional, fully-regulated markets. This is adding legitimacy to the venture, forcing both those who doubt its potential or believe it all a big fraud to reexamine their stances.
Yet, some bitcoin and cryptocurrency developers and advocates reject the notion of gaining legitimacy from the traditional financial institutions. For them, the notion of bitcoin or any other cryptocurrency is to be free of the approval or rejection of these institutions. The same is a part of the very core appeal of the autonomy of digital currencies.
In 2018, the same debate inside of the digital currency domain will continue with even more zest than before as more financial institutions look for a foothold in the crypto market. In a sense, they will continue to drive a wedge between those who want more mainstream influence and those who want none to begin with.
The answer to the same issue is undoubtedly in finding some middle ground between becoming a part of the mainstream and rejecting all of it. The problem will be finding how that middle ground looks like.
The Reasons for the Growth
Another piece of the 2018 puzzle is the reason for the rapid growth digital curries attained in 2017. Some believe it is directly related to the previously mentioned Wall Street companies taking a part in the crypto market. However, others provides a completely different perspective.
For example, earlier this year Bats BZX exchange had their BTC ETF application rejected by the SEC. This was due to the fact that the bitcoin markets are illiquid and unregulated. This was only one of the regulatory hurdles that the bitcoin entrepreneurs experienced.
Others include the ETF denial of LedgerX, but also the Chinese regulators stopping zero-fee trading before closing all exchanges soon after. But, in spite of all of this, the market cap of the network rose from $20 billion to an incredible $300 billion in only nine months.
Even before 2017 million were using bitcoin to attain loans, pay for goods and services or even bet online using BTC. But now, all of the growth indicators are in the green and figure out how this came about remains somewhat of a mystery.
Feeding the Expansion
The listing on the futures market, besides boosting the price and providing the network with media coverage, will undoubtedly provide a huge effect on bitcoin. The interest and the rise in demand will likely create greater volumes in 2018.
Also, the regulated markets and new ETFs on the horizon might end up deepening liquidity and reduce volatility. This should lead to bitcoin becoming a better store for value and a more effective medium of exchange.
For many, this is the actual element that is the long-term enforcer of market cap and price rise – the potential for a stable cryptocurrency that still attains its advances. 2018 will most likely begin manifesting some elements of that desirable ecosystem, but they will be far from finalized at the start of 2019. That is even and more optimistic outlook, but regardless of this, the network will continue to attract new investment that will feed its expansion, either directly or indirectly.
It is safe to expect a host of new companies to enter the domain of digital currency. This is especially likely for the mining sector, which likes many other hybrid software-hardware IT fields, like for example eSports, holds the promise of huge ROI.
Even now companies that publish their intention of entering the mining of cryptocurrency see their stocks jump up immediately. Globally, these companies, most of which are operated from western nations, could slowly start to drain the Chinese centralized hashing power. Right now, over 80% of it is in China, but the number will surely change in 2018 in favor of the rest of the world.
Still, at the same time, things like forking, regulation changes, and scaling issues will also mark the upcoming year. Many companies will end up going under thanks to one or more factors like those previously mentioned.
But, with the changes on all fronts of bitcoin, including the so-far elusive mining, it appears that 2018 will set up a stage for a dynamic year 9 of BTC.