Investing in Bitcoin in 2018-2020 – What to Expect
Experts say that Bitcoin is expected to continue its impressive rise in value in the near future. These claims do not only come from the medium to large corporations, individual users, and investors, but we will likely see governments warm up to the idea of regulation, as well. To give you some insight into what’s to come in the next couple of years, I list the key factors that are to steer the Bitcoin ship from now until 2020.
Exponential Price Increases to Continue
For those looking to invest in Bitcoin, the future looks very bright, at least for the next couple of years. The early exponential curve from the second quarter of 2017 is expected to continue in the near future. A few industry experts claim that Bitcoin’s value may drop in the first few months of 2018, but as the year progresses, the value is expected to rise steeply. It’s also said that this trend will continue for the entire duration of 2019 and 2020, with a few fluctuations in between. Furthermore, Human Discovery Platform, a group of Quantum physicians and astrologists, state that Bitcoin may surpass the $100,000 mark before the year 2020.
Emergence of Commodity Markets
The continuous rise of Bitcoin will not come unnoticed by the world’s leading finance and investment corporations. Even though the majority of these entities are yet to embrace Bitcoin and its underlying technologies, our understanding is that they will be forced to embrace it. The result is the emergence of commodity markets specifically meant for Bitcoin trading. We already saw Bitcoin making its biggest score to date towards the end of 2017 by featuring on the futures market. The commodity markets are expected to be common markets allowing traders from every corner of the globe.
Several Governments to Regulate Bitcoin
With the exception of Canada (under the Anti-Money Laundering and Counter-Terrorism Financing Act) and Mexico (under the FinTechLaw), no other country in the world has put laws in place that legalize Bitcoin as a medium of exchange. Many governments have undefined regulations, while others remain quiet on the subject. This, however, is to change soon, as more countries are expected to join Canada and Mexico in legalizing Bitcoin. Many have already done so, including the US, Morocco, Nigeria, Kenya, South Africa, Swaziland, and Zimbabwe. Before the end of 2020, expect no more than 20 governments to have promulgated and enacted Bitcoin-related laws, rules, and regulations.
Emergence of Crypto Equities
Despite the endorsement of several Initial Coin Offerings (ICOs) by many celebrities (most of whom are from the entertainment circles), only a handful of companies accept Bitcoin or any other cryptocurrency as a form of equity. However, the outlook paints a different picture. It seems only a matter of time, especially after our previous forecast, until we will see the emergence of crypto equities. Those in possession of hundreds or thousands of Bitcoin are to reap huge rewards and will surely bank on Bitcoin’s ridiculously high valuation to acquire huge stakes in companies of their preference.
Tax Collection Struggles
Amidst all the great things, there’s likely to be one or two problems down the line. By regulating Bitcoin, governments put themselves in a win/lose situation. They may “win” from collecting taxes from transactions and remittances; however, it’s only possible if all parties operate in good faith (i.e., the government and the taxpayer). Apart from this, they might find themselves in the “lose” scenario if they fail to properly carve out ways of how to tax Bitcoin transactions. Bitcoin is different from fiat currencies in that the central banks have no oversight role over cryptocurrencies; therefore, they cannot use the existing taxation systems and simply apply it to Bitcoin.
Why Being Cautious About Investing in Bitcoin Is Worth Considering
As with any “craze,” there are always more than a few reasons why one should practice caution, especially when investing real money is concerned. Currently, it seems that the online community’s craze (for want of a better term) for cryptocurrencies such as Bitcoin and others like Ethereum is almost without end. In fact, when one considers how the dollar value has been multiplied to Bitcoin, one is able to gain a much clearer picture of this. Since the beginning of January 2011, the dollar has been multiplied by 30,000, with a multiplied value of 10 applied this year alone.
ICOs, or Initial Coin Offerings, have already raised well over $3.5 billion in 2017 alone, quite a remarkable figure. Initial coin offerings are a way for companies (online or otherwise) to finance their brand or new venture by selling tokens which are nothing more than their own branded cryptocurrency. However, it would be wise to be cautious when investing in new ICOs, particularly for certain sectors such as insurance companies, regulated banks, pension funds, and other invested institutions.
This is mainly due to cryptocurrency sustainability as well as its inherent volatility. ICOs are often seen as comparable to shares in a company, although this isn’t quite accurate. When you invest in a company through shares, you essentially buy votes in that company; with ICOs, this is not the case. ICOs issued as tokens also run the risk of becoming worthless since they are linked to a cryptocurrency that can become worthless in an instant, all of which is not linked to whether or not that company is successful.
There is no intrinsic value in Bitcoin, and it is susceptible to the possibility that it could crash to a zero value based purely on the potential loss of trust that is invested in its current buoyancy. Of course, one could argue that virtually every sort of investment trend can be seen as a bubble. The same could apply to gold, or to various terrestrial currencies such as the dollar or euro, which can crash based on several intrinsic factors.