Crypto currencies in 2018 and how the future looks for them

Crypto currency update

This post is mainly a look back for the year 2018, but I will start it from the end of 2017 as there was a remarkable point.

Price was going down

The price of the crypto currencies rose like a rocket in year 2017, reaching the peak in December. At that moment Bitcoin was valuated near 20.000 USD. Then the price has been going down the whole year 2018, and it has lost 80% of it’s peak value, trading now somewhere between 3,500-4,000 USD. Many investors that jumped in when the price was rocketing have burned their fingers and some have proclaimed bitcoin dead once again. However, that doesn’t seem to be the case. Read forward to find out why I think so, but let’s look first that what else happened in 2018.

When Bitcoins value peaked in December 2017 it was the most searched term in google (Check it at Google trends) globally. It was in the news all around the world and people got to know it.

It was banned few months in ad networks

Bitcoin and blockchain fewer got ICOs to get lot of money and many of those projects were not so good. That got cryptocurrencies and ICOs totally banned in major advertisement(social) networks (facebook (6 months), google (6 months) and Twitter (still banned) for a some time, until they managed to get better rules on the place.

Banks made it harder to get

Banks started to make it harder to purchase crypto currencies (since they consider it as a threat to their business model and/or for protecting their customers). At the same time investment banks and exchanges started preparing for using cryptocurrencies. E.g. Goldman Sachs purchased crypto exchange Poloniex, Opened Bitcoin Trading, and considered custody offering for crypto funds. While Nasdaq was thinking to become also cryptocurrency exchange and acquired related knowledge.

Others made easier to get

When Banks were making it harder to get cryptocurrencies, others started to making easier. Japanese instant message giant LINE (200M monthly active users) launched own cryptocurrency token (LINK at 23.8.2018). Russian IT giant MailRu(80 M monthly users) enabled bitcoin payments, Square Cash app(10 M monthly users) enabled bitcoin purchases and RobinHood started offer cost free crypto purcases in certain USA states (Update: Originally in 5, but now in 19). Crypto ATMs were installed ever accelerating pace.

Telegram (Other instant message app with also 200M active monthly users) collected 1,7 Billion USD funding for it’s own crypto currency project, which is well on it’s way. At the end of the year we also learned that Whatsapp (1,5B monthly active users) is planning to publish own cryptocurrency.

What is the current state

  • Bitcoin’s price has now been quite steady for a month in around 3500 USD. (That is still 250% higher that in the beginning of 2017.)
  • Bitcoin trading volume has stayed high. It has also dropped about 80% from the peak, but it is 20 times higher than in the beginning of the year 2017, and it has stayed on those levels almost the whole year. Perhaps growing a bit to the end of the year.
  • Bitcoin is now know globally. Even almost 80% of Americans have heard of it.
  • Statistics from localbitcoins are showing that individual people are purchasing bitcoins still actively.
  • Statistics from bitcoin ATMs are telling the same story. Count of the bitcoin ATMs has doubled in the year 2018.

Looking for the future

  • Bitcoin has proven to be useful in Venezuela and Argentina, where the inflation of local currency has been so high that bitcoin has outperformed those currencies even in 2018, and strict withdrawal restrictions for local currency severely limits it’s usage. So people have found out that bitcoin stores value better than local currency and allows them to move money as they want. This gives an example for the rest of the world. At least people in neighboring countries have taken a hint as in the other Latin America countries there is also high interest to bitcoin. According Localbitcoin statistic in Colombia and Peru the trading activity is above the price peak period, and activity is also high in Chile and Mexico.
  • India banned crypto currencies in 2018, but now it seems that they might change their mind in 2019. That would allow huge amount of people to access bitcoins, and India has also problem with it’s currency. Perhaps there will be also high demand for other mediums for storing and moving value.
  • There are coming new stablecoins to the market, that are thought to make crypto currencies more appealing for the big audience and more suitable for ecommerce.
  • Bitcoin has improved technically during 2018 and with lightning networks it would be ready to accommodate much higher transaction volumes with lower transaction costs (Both were problems in the peak time).