To say this year has been phenomenal for crypto is an understatement. 2017 saw $4bn raised in initial coin offerings, a market cap increase from $17bn to $640bn and the launch of a Bitcoin futures market. The world is waking up to crypto, and over the next 12 months, we will continue to witness the largest wealth transfer in modern history.
To close out the year, I wanted to make some predictions about the next 12 months – if only to look back at them next December to see how wildly off the mark they were.
This is not an Ethereum price prediction post (lie, there is one) but some insight into many fundamental changes that I believe are likely to occur next year. Should these predictions find some basis in reality, the implications will be huge. Take this all with a pinch of salt – while I’ve been in the market for several years, I have been wrong more times than I care to admit. Combine this with your own research and the opinions of others – seek financial advice before investing and never put in more than you can afford to lose.
Without further ado…
Coinbase Adds 5+ New Cryptos
Coinbase currently lists Bitcoin, Ethereum and Litecoin. The platform registers 50,000 new customers per day with a userbase that will stretch well into the millions. In November 2017 the platform gained mainstream attention when their app was listed in first place on the App Store. Coinbase is a huge on-ramp for new users entering crypto as the alternative options can be cumbersome and problematic. The Coinbase process for purchasing crypto is – for better or for worse – easy. What gets listed on Coinbase will be of massive interest to investors who want to buy before it becomes available to the masses (placing significant upwards pressure on demand). Predicting the right coins could prove extremely profitable.
GDAX (Coinbase’s exchange service) has their own “digital asset framework” which explains how they judge each token and what can be considered for acceptance on their platform. This framework has been referenced recently by Asif Hirji, President and COO of Coinbase, and it has been widely anticipated that Coinbase will add several new cryptocurrencies in 2018. Here are some predictions as to what might be coming:
Comments by Brad Garlinghouse combined with Asiff Hirji above make it seem highly likely that XRP will be added to Coinbase within months.
Formerly known as Darkcoin, DASH has re-positioned itself (thanks largely to a self-funding marketing budget) as a leading cryptocurrency for payments. DASH ticks a lot of the boxes required by the GDAX digital asset framework, I fully expect to see it featured in 2018.
Ethereum Classic (ETC) and Bitcoin Cash (BCH)
“Coins with confusing names” are not called out on the GDAX framework, and both BCH and ETC make a solid case for being listed. There have been rumours circulating that Coinbase had listed both ETC and BCH wallets in a number of user accounts, however the evidence provided was through website screenshots, something which can be easily faked. See Dogecoin below:
This would however, explain the recent pump for both ETC and BCH. I would expect to see these two tokens added to Coinbase in Q1 2018.
Augur is a prediction market platform that has been in the making for 3 years. As with any Ethereum application (dApp), success depends largely on the transaction throughput of the Ethereum blockchain, which is currently too low for even a marginally mainstream dApp. Despite Augur requiring the likes of Raiden and Sharding (~1000x increases to throughput) to prosper, the token may well get a listing on Coinbase due to its novel tech, governance, economics and market demand.
The above cryptocurrencies seem likely to be included in 2018; the following are highly speculative, however do have many of the characteristics required by the GDAX digital asset framework.
- Golem (GNT)
- Civic (CVC)
- Storj (SJX)
Whilst a listing on Coinbase does not change the fundamental value of these tokens; it is a huge seal of approval, and any tokens listed become available to the speculation of a massive market outside of the other crypto exchanges. In the short term at least, the upward pressure on each token’s price – should it be added – would seem inevitable.
“Ponzi” is a term thrown around a lot in the world of cryptocurrencies. Most claims are unfounded – often used as a way to dismiss new technology without the need to read deeper. However, some cryptocurrencies are indeed ponzis, and BitConnect shares an awful lot in common with one. The BitConnect token (BCC) has little to no utility; it derives its value from a “staking” scheme which provides a daily interest rate of 0.25% (up to 40% per month).
Combine this with a referral scheme which pays out commission to successful recruiters and you have the hallmarks of a ponzi scheme. The economics behind BitConnect are simply not sustainable, and it seems likely that this pyramid will collapse in the next 12 months.
$5tn Cryptocurrency Market Cap
At the start of 2017, the cryptocurrency market cap was $17bn, today it’s over $640bn – an increase of almost 40 times. There will inevitably be a massive crash in the months/weeks ahead and the mainstream media will rehash their their “Bitcoin is dead” material; but the rally will go on shortly after. The cat is out of the bag, and the value of this technology is now being understood and realized in the form of “killer apps” (Bitcoin’s store of value being at the center right now). Institutional money is well and truly on its way and I would predict a $5tn market cap by the end of next year. In fact, to imagine just a ~10x increase over the next 12 months seems to be almost a cop-out, but this current bubble could wipe 50% from the market and the climb will be a little bit tougher. As has been seen since the inception of cryptocurrencies, strong handed investors will win the day.
Moving from crypto to something more stable (fiat) is frictional and fraught with fees. Tether (USDT) is a dollar-pegged crypto but it lacks transparency and the risk of holding USDT is without a doubt higher than the risk of holding USD. Stablecoins like MakeDAO’s DAI token (built on the Ethereum blockchain) will make it possible to hold value inside crypto but without the volatility. Investors will be able to use the DAI to quickly enter and exit crypto markets, and users will be able to spend it with certainty over its price. Stablecoins will be a major talking point of 2018 and will drive even further growth across other tokens.
Monero (XMR) Will Return to Top 5
Monero was once in the top 5 cryptocurrencies before the likes of Cardano, Bitcoin Cash and IOTA entered the scene. Monero is a privacy coin that is entirely anonymous and unlike Bitcoin, wallet balances, addresses and transaction values are not visible. There is strong demand for a currency that operates in this way, and XMR is best positioned (network effect) to take the lead here.
More Bitcoin forks
In 2018 we saw Bitcoin Cash and Bitcoin Gold fork from Bitcoin and become highly successful (in terms of market cap). Both Bitcoin Gold and Bitcoin Cash are – suspend disbelief for a second – multi-billion dollar cryptocurrencies. In the case of Bitcoin Gold (BTG), its developers were able to effectively premine BTG tokens before they became available to the public, making their founders extremely wealthy (generating about $36mn in value for themselves). The appeal of such an easy buck will attract both good and bad Bitcoin forks, and I would anticipate several new Bitcoin X’s Y’s and Z’s in 2018. New users can expect to be thoroughly confused.
Ethereum Price Prediction
Predicting prices is one way to look foolish but I simply can’t help myself when it comes to Ethereum. The market is going to mature over the next 12 months with – hopefully – scaling solutions near or at launch as well as Ethereum futures contracts and ETFs traded on major US exchanges. Blockchain.info’s CEO also believes that in 2018, central banks will start to stock up on crypto and Joseph Lubin’s positive outlook on Ethereum vs Regulation (in my opinion crypto’s single greatest risk as an asset class) inspires some confidence.
Ethereum price at the end of 2018? $5,000.