Crypto Outlook for 2018
Crypto has experienced a massive increase in the last year. Growing from $18 billion in January 2017 to $720 billion in January 2018. The growth has been facilitated by the years it has taken to build a solid foundation. Infrastructure being built, projects being created, and legitimacy being given by individuals within the establishment. We continue to see an explosion of growth fueled by the interest it has garnered amongst people that see it as a new asset class that can become as dominant or even more dominant than Gold and fiat currencies.
What is the appeal to digital assets?
The appeal to cryptocurrencies has multiple facets, but the dominants ones come from the digital component that it possesses and the unknown. The digital world has taken over our lives. We live with our cell phones, work on computers, and handle most of life with technology.
Cryptocurrencies complement this digital mindset perfectly and make it an attractive asset class to enter because of the digital component. With cryptocurrencies, you have control over your assets and can do with them as you wish. Something that is not easily facilitated by other asset classes. The digital component makes us curious of the asset class and the unknown makes us addicted to it.
What is the unknown?
The unknown for what the future holds of this new asset class. Will some of these currencies become a world reserve currency? Can the price of these assets do another 100%, 1,000% increases or more? The unknown is what has taken the dominant role in the cryptocurrency markets right now and will continue to dominate in the near future.
Nobody knows what will happen. Crypto is a completely new asset class with a market that is available for anybody with the means to enter and get involved. It is international, and open 24/7. The barrier of entry is lower than any market. The unknown is impossible to ignore.
2017: The year the world fell in love with Crypto
2017 was the year that crypto came out to the world and 2018 will be the year that the world falls in love with crypto. The unknown is the dominant entity in the market in 2018. The market has risen an insane amount and is on track to hit $1 trillion within the next few months.
Every day hundreds of thousands of people are entering crypto markets wanting to have a piece of this digital asset class.
Major exchanges are having difficulty coping with the flood of new registrations and many are temporarily closing down new registrations because of it. Bittrex, one of the largest exchanges in the world, has closed new account sign ups since December 15, 2017.
Combine the excitement of cryptocurrencies with exchanges not allowing people to sign up till later and you have a recipe for mass user adoption and speculation. Every day millions of people are getting exposed to cryptocurrencies through the media and online outlets. Combining the unknown and the flood of new market participants will make 2018 a year to remember.
“The market will blow past $1 trillion and keep going.”
Key Trends for 2018
The key trends for 2018 are privacy, platform, and masternode cryptocurrencies.
The privacy sector within cryptocurrencies is tiny. Comprising less than $10 billion, it is a sector that will see immense growth in 2018. The market is new and hasn’t understood the importance of privacy. All assets that aren’t privacy-centric are built on public ledgers that anyone can see and analyze. This means that anybody that knows your addresses can see and track your movements. Companies already have the technology to track and spot the movements of individuals, organizations and cryptocurrencies. Humans value privacy heavily and this will be reflected in the market once it understands the lack of privacy amongst all of these cryptocurrencies. Privacy sector will grow massively in 2018.
Zcoin is positioned well to take advantage of the growth the privacy sector will see in 2018. It uses zero-knowledge proofs that allow users to mint and spend coins with no transaction history. This means that any transaction history that you had with your zcoin can be destroyed and a new zcoin that has no traceability to you nor to the transactions you had prior will be created.
Zcoin is heavily undervalued at $100 and a market capitalization of $386 million. Compared to the privacy market leader Monero at $6.7 billion market capitalization.
The platform sector within cryptocurrencies is rapidly growing. Ethereum is the largest platform with a market capitalization of over $100 billion. The dominance of Ethereum comes from its ability to have projects built on top of its platform. Ethereum will continue to grow because of the network effect it possesses. Assets built on top of ethereum will benefit from the trend of platform sector growth as well as other projects that are doing similar work to ethereum. Find the platform projects that are doing similar work to Ethereum in their early days. Those will grow big in 2018 and forward.
Komodo is quietly sitting at $800 million market capitalization and will explode upwards once the market understands what the platform is trying to do. Komodo has made it easy for programmers to work on top of its platform by allowing them to use any programming language to create programmable contracts. This freedom is not enjoyed in a platform like Ethereum that requires a specialized programming to work on it.
The beauty of Komodo is that developers will enjoy the future development upgrades that occur on the platform automatically. This means that privacy features, decentralized exchanges, pegged assets, decentralized funding, and micropayments channels will all be able to be used by those projects being built on top of Komodo.
Komodo will do extremely well in this next trend increase of platforms and is my pick for 2018.
The masternode sector is different from privacy and platform sectors because it can be part of any project. Masternodes are run by users that hold a specific amount of the asset. There are two facets to masternodes: running system and stakeholder equity. Masternodes help run the system by having a network use their node to run their processes instead of having to rely on the network itself. Users are incentivized for running a masternode and some of these rewards go from 100% to 10-20% a year ROI.
The stakeholder equity is another interesting facet of masternodes. This makes nodes able to have a say in the future of a project. DASH uses masternodes to run their decentralized budget system. The money to incentivized masternode holders and to provide the monthly budget comes from taking a percentage of the block reward that is being mined by miners. Instead of miners receiving 100% of the block reward they receive 45%, masternodes receive 45% and the budget system receives 10%. As a masternode owner one has the ability to vote where budget system money is allocated monthly.
Masternodes will be big in 2018 because people want passive income and projects see masternodes as the best form of governance at the moment. We have seen how difficult governance has been for Bitcoin which ended up fracturing the community in two: Bitcoin and Bitcoin Cash. Masternodes implementations and projects that have such a system running will do well in 2018.
Dash created the masternode system and will do well due to its first mover advantage. It currently has more $7.5 million in its monthly budget that it can use to fund development, marketing, projects, and many more proposals that are submitted to the community which masternode owners are able to discuss and vote on. There is no other project like Dash that has the financial power, decentralized budget system experience, and community cohesion in the cryptocurrency space. 2018 will be huge for Dash, just like it will be huge for many other projects that have started to copy Dash and their masternode system.
What changed for crypto in 2018
The difference from last year to this year is that the market participant pool is large and growing rapidly. Everybody is listening to stories of assets rising 10x in a few weeks and want to get some of that action. Institutional investors, companies, organizations, and governments have barely started entering cryptocurrency and will be entering the market in 2018. We see how attractive cryptocurrencies have become in the stock market with some stocks going up 10-20% on any mention of blockchain or cryptocurrencies being added, used or entering the industry. 2018 will be a big year and the year that institutions enter heavily.
There are many opportunities. Entering assets that closely align to the trends I have listed above will do very well. The market will get even more speculative and any asset that has a strong marketing base, and fundamentals will ride the wave of speculation. Many of these assets will keep rising massively because institutions and individuals will fall in love with them based on the narrative being played out and the strong fundamentals it has compared to other assets.
There are also many risks. The market is heavily inflated and speculation has never been higher. People are entering the market to make money and not to use these assets. I see the speculation only increasing and the disconnection from reality worsening. This brings about great opportunities for anybody that understands the market well and knows how the market will react and take on specific assets. This also brings a lot of risk because eventually the market will have to correct significantly in order to reverse the effects of mass speculation.
The cryptocurrency industry is in an interesting place right now. It is not ready for mainstream adoption, but mainstream can’t get enough of it. This is why the market is so heavily speculative and will only get worse. You will do very well riding this speculation, while also keeping in mind that most of these projects, if not all, aren’t close to being adopted by the masses. The user interface isn’t ready, scaling problems are still being tackled, and the projects are still trying to figure out exactly what cryptocurrencies will disrupt. This market is just beginning and will only continue to grow larger. It also means that the rapid growth will leave many projects in the dust because they were unable to adapt and just weren’t feasible.
This is where Medici Crypto thrives in cryptocurrencies. Having more than three years of experience in crypto has given us a better understanding of the irrationality of the crypto markets, how specific assets will perform and when it is time to get out. Everybody entering the market is new to it and has no idea how it works. Many are freaked out by the massive increases and decreases in price when Medici Crypto understands how normal it is for crypto. We specialize in investing in long term assets that will perform for years to come while also capitalizing in opportunities that present themselves in these waves of speculation that we are witnessing. By having a solid grasp of the market Medici Crypto has been able to take advantage of the irrationality of the market while also minimizing the risks by investing in assets that will continue to perform far beyond 2018.
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This post is not financial advice and reflects the personal views of author. The author invests in digital assets and has positions in the aforementioned cryptocurrencies.
Disclaimer: This article should not be used as investment or financial trading advice. Please conduct careful due diligence before investing in any digital asset.