2017 has been a crucial year for cryptocurrencies. From relative obscurity, we have seen the sector grow by leaps and bounds; even those who had never shown interest in trading and investing, have now started to talk about cryptocurrencies in general and Bitcoin in particular.
However, as always happens, the events of the past can not be used to predict the future; we can only analyze historical data to try to understand how the sector will evolve in 2018.
In 2017, Bitcoin was the leader in the cryptocurrency sector: prices rose from $ 1000 at the beginning of the year to 19,000 touched before the end of the year, attracting the attention of everyone, including the central banks of various countries. As we head towards the end of the year, however, we are witnessing growing signs of fatigue in the bitcoin market, attributable to the phenomenal price increase that has brought the currency out of reach of ordinary people. We are also witnessing the introduction of Bitcoin futures, an event that has helped to increase the pressure on the market, as well as some of the proposed regulations.
It is in this scenario that we are witnessing a growing focus on alternative sectors such as ETH, LTC, IOTA and Ripple. I believe that in 2018 the altcoins will dominate the world of cryptocurrencies, while Bitcoin could remain in the background. I do not want to say that the altcoin did not go well in 2017, given that this year the price of the Etherereum has risen a hundred times; however they did not get as much attention as the one reserved for the BTC. In 2018, however, in this respect things will change: the altcoins will take hold on investors and speculators, looking for the next bitcoin.
Ethereum and ripple, as well as another currency called IOTA, are driven by some strong fundamentals that make it different from that bitcoin. With more and more traders and investors looking for value in their investments, these coins will probably attract interest in the medium term and the first signs in this sense are there for all to see.
With rising prices and growing attention from traders and the common man, we will also see increasing attention from regulatory bodies. Towards the end of 2017, we have seen many central banks and regulatory bodies take note of the price increase and also the way in which these cryptocurrencies are misused for money laundering; we are therefore witnessing a growing repression, probably destined to increase in the course of 2018: the regulatory bodies of a growing number of countries are imposing the monitoring of investments and transactions in cryptocurrencies and many regulatory bodies start to tax them.
We already see countries like Japan, South Korea and Malaysia follow in the footsteps of the United States and Singapore, adopting ICO control measures and taxing the gains earned in cryptocurrencies, while other countries, such as China, banned them definitive. This part of the sector is destined to mature even more and next year the situation is destined to overheat: banks and regulatory bodies will begin to accuse the blow and at the right time they will realize the need to intervene. The cryptocurrency sector is also looking for a coveted recognition and, if this regulation goes in this direction, it will be a compromise that will probably be welcomed with open arms by the sector.
Once the markets are regulated, more and more sophisticated investors and traders will probably enter the market, useful for a slow and steady maturing of the market in the medium and long term. If 2017 was focused on bitcoin and its price increase, 2018 could focus on altcoin and the increasing regulation and maturity of the cryptocurrency market in general, paving the way for its acceptance in the general financial system.
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