Bitcoin Price Expected to Reach $30,000 by the End of 2018
The price of Bitcoin has increased from $1,000 on January 2017 to about $19,000 in December 2017. The cryptocurrency skyrocketed at the end of last year, and its popularity increased to a point that now, online users from all around the world are looking to trade Bitcoin. The question is, will Bitcoin still dominate the cryptocurrency market this year?
Analysts predict that if no major incidents occur, such as governments outlawing cryptocurrencies, Bitcoin could easily reach $30,000 by the end of the year. One factor that could highly influence the price of Bitcoin is the introduction of new technologies that could allow faster transactions with lower fees.
Blockchain expert Dan Ciotoli explained that Bitcoin's price could see a boost of up to $30,000 thanks to a new technology that will replace blockchain. The new network for cryptocurrency transactions, called Lightning, is a proposed solution that allows lightning-fast blockchain payments without worrying about block confirmation times. On the network’s website, it is stated that security is enforced by blockchain smart-contracts without creating an on-blockchain transaction for individual payments, while payment speed will be measured in milliseconds to seconds. The fact that the transactions are made off-blockchain allows for exceptionally low fees, instantly and without 3 rd party custodians.
How is the Bitcoin price determined?
Bitcoin is very different from a traditional currency, due to the fact that it is not issued by a financial institution or controlled by any government. Since it’s an online asset which can be bought and sold all around the world via internet, the cryptocoin is influenced by a variety of aspects which do not include monetary policy or inflation rates. Some of the most significant factors which can boost or lower the price of Bitcoin include:
Market demand for Bitcoin and its limited supply
Just like in the case of any good or service, the value of Bitcoin is influenced by supply and demand. High demand and low supply usually leads to an increase in price. Since the number of Bitcoins is limited to 21 million, 80% of these already having already been mined, the demand is expected to rise with time, which would eventually lead to a price increase.
Regulations that govern its sale
Restrictions imposed by certain governments regarding Bitcoin can drastically influence its price. Each time a government releases official statements about its position on Bitcoin, there is a drastic change in the price. For instance, when Japan accepted Bitcoin as a legal payment in April 2017, we’ve seen a high increase in Bitcoin rates. On the other hand, a ban on Bitcoin by high-power governments could easily make the value slump.
Number and value of competing digital currencies
Bitcoin will probably always remain the most well-known digital currency, mainly due to the fact that it was the first one. Nowadays, investors can choose from a multitude of currencies, including Ethereum, Litecoin, or even Dogecoin or Peercoin. Even though many of these cryptocoins come with different advantages that Bitcoin doesn’t offer, Bitcoin will probably still remain on top of the list for a long time.
Since Bitcoin is a volatile currency, not controlled by any government or financial authority, the media can easily influence its prices. Manipulation by news sites, including articles about hacking, banning or important celebrities having a negative opinion on Bitcoin can result in a negative influence on its value. Even the most insignificant rumors can lead to a decrease or increase in price. Others believe that negative publicity is still a way to spread the news about Bitcoin, making it even more popular than it already is.
Market manipulation by high-influence traders
A mere 1,000 people own 40 percent of Bitcoins. These “Bitcoin whales” have the most significant amount of power when it comes to sinking or floating the cryptocurrency market. Simply by selling a large amount of their Bitcoins would result in a dramatic dip in value. Even so, digital currency exchanges would probably not allow these big investors to manipulate prices so easily. Many smaller investors have recurred to “whale watching”, meaning that they’re tracking the addresses of these high rollers in order to prevent the storms that might come in the market if a big investor suddenly transfers thousands of coins to an online exchange.
Bitcoin price fluctuations are inevitable, and all these factors can contribute to a sudden growth or slump in the price of the digital currency. It is difficult to predict whether Bitcoin will go up or down in the nearest future, but its supporters believe that with new technology that comes to facilitate Bitcoin transactions, the cryptocurrency is expected to go up and increase even more in popularity in the months to come.
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