Should We Be Optimistic About Cryptocurrency in 2019?

No matter which way you look at it, we can’t say 2018 was the best year for crypto. Bitcoin hit record highs in 2017 before falling quite a bit. The number of ICOs has fallen significantly, though this is more due to regulatory changes than a decline in demand. Some think that cryptocurrency is due to soar again, while a few doomsayers think it will crater. Should we be optimistic about cryptocurrency in 2019?

Natural Market Cycles Are Taking Over

Traditional market cycles are more than just recessions and booms. They also include bubbles for new technologies and areas of opportunity. When a market matures, the valuations decline before they level off. This is very different from a bubble popping, where investors see the value of the items collapse, never to return near market highs. We’ve seen cryptocurrency prices decline, but they seem to be leveling off right now. There are now normal fluctuations in the prices due to highs and lows in demand. The market has matured, and natural market cycles take over as feverish speculation stops.

Adoption Rates and Overall Acceptance Are Steadily Rising

Cryptocurrencies have grown from a few million adventurous investors to tens of millions of users. At the same time, a sizable minority of millennials own cryptocurrency and we can expect interest to grow within this crucial demographic. We can also expect older adults to come around as well, as the price fluctuations of cryptocurrency stabilize and usage expands.

The decline of ICOs and rise of secure tokens means there are fewer scams and increasing trust in cryptocurrency. That will enable many people who were against cryptocurrencies to be willing to buy it and use it.

The Growing Legitimization of Cryptocurrency Will Help It Grow

Many governments that were opposed to cryptocurrencies are reconsidering their stance. Instead of banning it, they regulate it. This gives cryptocurrencies a legitimate status they didn’t have before. When the government approves it, the association between cryptocurrencies and crime is removed. That lets many who were on the sidelines invest in it. And the legitimization of cryptocurrencies by various governments allows institutional investors to get involved. When the average person can buy cryptocurrencies via the stock exchange or hold it in a retirement account, demand for cryptocurrency will increase, causing its value to slowly go up over time.

Not to mention that some states are now considering accepting cryptocurrencies as a form of payment for taxes. Ohio became the first state to accept Bitcoin for this purpose and other states might follow suit this year, which could do a lot to further legitimize cryptos as legitimate currencies. That’s why it would be wise for smart investors to stay updated on recent developments and new regulations, and make sure that they check crypto news today.

The Market Demand Is Sustainable

Cryptocurrencies saw amazing spikes and crashes because of the speculation in those currencies. We’re now seeing sustainable, long-term demand from several sources for all cryptocurrencies.

Once the speculation stops, which could happen this year as major cryptocurrencies bottom out and real investors jump on board, coins with actual use cases will start to shine. Others will flock to cryptocurrencies to protect themselves from hyperinflation. The gaming industry has also jumped on board, and we can expect the huge gaming community to support coins that revolve around it.

The next generation of gaming is going to involve augmented reality and virtual reality. Blockchain-based games will be a major part of that, controlling intellectual property and collecting payment from players around the world. Cryptocurrencies also allow investors of all types to invest in projects. In fact, one major arcade is dedicated to doing just that.

The Advances in the Underlying Technology Will Sustain It

One of the frustrations that had slowed widespread use of cryptocurrencies is the relatively slow processing of transactions. Several projects underway to speed up the efficiency of blockchains so that transactions are processed faster.

This will allow businesses to process cryptocurrency payments as quickly as legacy systems. More energy efficient mining technologies make it easier for new cryptocurrency units to be acquired. This will make mining much more affordable and distribute the total amount of miners from the few low-cost mining hubs we have today.

Conclusion

While at first glance, it can be easy to be pessimistic when looking back at 2018, investors should see this as an opportunity. Scared money is moving out while the smart money is moving in. Cryptos will eventually start to be used for their actual purpose, stabilize in the process, and deliver on their promises.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.