Bitcoin, that was flavor of season in the cryptocurrency world for most of the last year, plunged to a new low starting 2018 due to various global triggers. However, the popular digital currency is back into a recovery mode. From a low of nearly $6,000, it has reached to $10,000 levels. Bitcoin was trading at $10,384.86 on CoinDesk today at the time of reporting. Nevertheless, the recovery hasn’t stopped, it’s still on. Although major cryptocurrencies including Bitcoin seem to be losing their value in 2018 and resulting in investors losing their investments, the year may prove to be best one for the cryptocurrencies especially Bitcoin. Here are the three main reasons:
Just like Initial Public Offerings (IPOs) in stocks, Initial Coin Offerings (ICOs) have been out in large numbers all across the world last year. However, not many of them turned out to be legitimate, and this resulted in interest of investors waning away. Cryptocurrency experts say that the ICOs will be more legitimate this time and will impact ethereum network all the more because ICOs usually require plenty of ether. That will increase the demand for the platform’s digital coin. More legitimate ICOs will elevate interest in ether as already being seen in the case of the ICO of messaging app provider Telegram.
It is estimated that nearly $10 billion to $12 billion will be invested in the cryptocurrency market this year. It is said to be nearly double the market capitalisation of cryptocurrency market this year. Hence, in terms of institutional investment, it will be a good year.
In the last few months it has been witnessed that regulation on cryptocurrencies has increased which means well for the future of the digital currency as investor trust increases due to it. In the long run, investors and companies need proper regulations and rules for sake of legal stability and certainty. They gain confidence to invest. Japan, South Korea and the US have been in process for quite some time to build stringent regulations for the cryptocurrencies especially Bitcoin.