The year 2018 has been off to a bad start for all cryptocurrencies. Whereas some people already despair, good things will come to Bitcoin and altcoins. Various experts are convinced all of the top currencies will mount a strong comeback during late 2018. It is always important to keep the bigger picture in mind.
We are not out of the woods yet. The bears could take the first part of the second quarter and even the whole quarter. But the bulls could take back control and finish the year in typical Bitcoin dramatic fashion
Top Crytocurrencies Will Continue to Dominate
There is a lot more to cryptocurrency than just the Bitcoin price. Unfortunately, the value of BTC dictates how the rest of the ecosystem will evolve in the coming months and years. Getting rich quick with cryptocurrency may not happen in 2018 as of right now. Even so, industry experts are not too worried about the current bearish market. In fact, one could say the markets are going through their regular volatility as of right now. BRD CMO and Co-founder Aaron Lasher comments:
“The game isn’t over, Digital scarcity is a major innovation in money and value, and we’re in the initial stages of a multi-decade trend towards tokenization of assets.”
Over the past seven days, all top currencies lost a fair amount of value. Declines range from 11.6% to 15.9%, with Ethereum getting the worst of it. Additionally, over 80% of the top 100 currencies ranked by market cap have decreased in value over the past week. Bitcoin is dragging everything down, as it always has in the past. This trend will not relent until the Bitcoin price effectively recovers the lost ground.
This is where things will get interesting later this year. It is not the first time Bitcoin has gone through a lengthy bearish cycle. At one point, the value per BTC dropped by almost 99%. Surviving that proved to be rather easy, hence this current dip doesn’t seem too problematic. These are still the very early stages for Bitcoin and other cryptocurrencies.
The Impending Bitcoin Bull Run
Several things are going Bitcoin’s way as of right now. The launch of ETFs allows institutional investors to speculate on cryptocurrencies. Although the demand seems rather low right now, things are gradually improving. With a regulatory body to be formed for these products, things can only improve from here on out.
Speaking of regulation, Bitcoin is still a hot topic among government officials. Any regulatory measure will legitimize the cryptocurrency industry as a whole. Not everyone is in favor of this particular trend, though, but it is a “necessary evil” to take this form of money mainstream in the future.
Currencies other than Bitcoin are still evolving as well. Ethereum is set to undergo some big changes, including a switch to proof-of-stake. Additionally, there are rumors Vitalik Buterin may effectively introduce a hard cap supply for Ether. Ripple is still making inroads in the financial sector as well. Litecoin has seen a few setbacks due to Litepay falling apart, but the currency will bounce back eventually.
Utility Tokens In Focus
‘Utility tokens’ to watch
Many commentators have noted that bitcoin and other cryptocurrencies have no fundamental value. But others have suggested that digital tokens like ethereum, which can be used to build new blockchain applications, could have value in the future as the industry moves forward and develops.
Some companies like IOTA and NEO are trying to create blockchain platforms that developers can build on. Those applications can be powered by IOTA or NEO tokens. The same is true of ethereum. Mick Sherman, co-founder and CEO of Hercules Tech, a data science company focusing on blockchain and big data, said these are the digital coins that could see their prices appreciate the most this year.
“Utility tokens and assets with a working platform and a clear-cut reason for requiring both a blockchain and their own token, are more likely to appreciate in value this year. Some of these cryptoassets will not be used for years, meaning they have no utility value,” Sherman told CNBC in an email on Tuesday.
The CEO warned that many of the blockchain projects could be years away and more bubbles could arise.
“The revolutionary nature of blockchain technology is what’s driving the hype and even though we may be years away from viable blockchain-based assets, we may very well see several more bubbles,” Sherman said.
Crypto Hedge Funds Crushed
There were many trends which emerged last year with the increase of the inception of cryptocurrency hedge funds being one of them. Last year saw 167 cryptocurrency hedge funds come into existence with the rise of Bitcoin’s value that really brought the cryptocurrency world into the mainstream.
It is estimated that at the current state of affairs, barely fifty of the cryptocurrency hedge funds will actually be able to raise enough capital funding to remain a sustainable option for the institutional investors who have staked a claim in them. Most of the rest are not going to make it.
Don’t say we didn’t mention that during all of the exuberance of 2017 some of the experts advised caution.
Check out the excerpt from our July 2017 Article below:
July 14th 2017: Hedge Funds Want In on 80,000% returns
Bitcoin rocketed above $19,000 for the first time on Thursday before falling sharply from its record high.
In trading on the Coinbase exchange, the digital currency hit a high of $19,340.
“It goes without saying that prices have reached a level where sentiment is exhibiting short-term euphoria,” said Mark Newton, managing member at Newton Advisors, in a note to clients.
“But to think prices are at mania levels where this could suffer a serious crash here… is a bit ridiculous.”
While Newton Advisors, the 100+ Crypto hedge funds that have opened this year and just about everyone you ask says sky’s the limit for Bitcoin, other experts have a different opinion. Matt Siebenthal, professional trader and Founder of BlockWealth Capital isn’t as optimistic. Siebenthal postponed plans to launch a crypto hedge fund- citing a possible correction to 7500 or lower before the cryptocurrency market- led by Bitcoin resumes it’s uptrend.
“I’m still bullish on cryptocurrency and a huge believer in the future applications of blockchain technology. But we’re near all time highs heading into historically the worst performing quarter of the year for Bitcoin. I wouldn’t be in any hurry to rush in here.”
Michael Novogratz, the former macro manager who’s turned into one of the biggest champions of bitcoin, is shelving plans to start his cryptocurrency hedge fund and is predicting that the digital money may extend its plunge to $8,000. Novogratz isn’t giving up on them and said he still believes they’ll be a disruptive force in finance.
I don’t want to be in the difficult position of explaining to my limited partners 8-14 months from now why the assets have dropped by 80%.
Seasoned Managers Patience Could Provide Clients Incredible Buying Opportunity
While so many of the hedge funds that opened doors in the second half of 2017 were crushed, those that exercised caution while many carelessly entered the space may very well present investors with an incredible buying opportunity.
The general consensus from the experts- at least the ones that called the sharp drop in Bitcoin prices (and took a lot of flack for suggesting the digital currency could drop 50% or better when it was trading near all time highs) are now calling for the next bull run to resume possibly in the 2nd quarter this year.
Cryptocurrencies could go on a bull run greater than last year and pass the trillion-dollar mark in terms of value, experts told CNBC
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