Cryptocurrency Market in Five Years
he cryptocurrency market had a slow growth trend prior to the market’s adoption to Bitcoin near the end of 2017. This trend had a huge impact on the government, the banking system and the market in general.
Cryptocurrency Market In The Past Year
Bitcoin (BTC) 2017 Until Today
During the past one year, there has been a huge change in the price of Bitcoin (BTC), due to the market jumping into cryptocurrency; specifically in the last few months of 2017. The market’s adoption of Bitcoin caused its price to surge to $19,783.21 USD in a short time period.
Price of Crypto-Related Products/Services
With the market jumping into the crypto market, the price of goods and services directly related to cryptocurrency are bound to rise.
Such goods and services include:
- Crypto-Trading Platforms
- Miner Hosting Companies
- Mining Rigs / GPU’s
- Hosting Sites (physical locations)
- Cooling Fans / Ventilation Systems
Barriers to Cryptocurrency
The government saw cryptocurrency as a threat as they are unable to control it. This threat was seen as a decentralizing of the government’s control of the economy. With the inability to control crypto, governments all over the world started to set up barriers such as:
- Regulation on trading/sale of crypto
- Hosting location and size of the operation
- Taxing of cryptocurrency
Central banks in most countries work with the government to regulate the exchange rate. The banks could increase or decrease the supply of cash to increase or decrease the exchange rate. Cryptocurrency supply was not supplied by the bank but by miners mining the coin; this meant the bank would not be able to control its supply and its effect on the exchange rate. Major banks in Canada such as Toronto Dominion Bank and Bank of Montreal stated they would now allow its customers to purchase cryptocurrency via debit or credit.
Many merchants worry about the acceptance of cryptocurrency due to its volatility. They cannot ensure if the coin price will go up or down, which in turn could lead to an increase or decrease in profit margins. If a merchant accepted payment of Bitcoin for a product at its peak of $19,783.21 USD and held on it until today (April 23, 2018), they would have lost $10887.195 USD.
Cryptocurrency Market In The Upcoming 5 Years
Bitcoin (BTC) and Cryptocurrencies Future
Bitcoins price since the drop from the hype of the market has begun to rise again. This slow rise is on par with the trend it had prior to the surge from the market hype. There isn’t a predicted amount BTC will stabilize at yet, but many people are hopeful that this rise could reach expected amounts of $100,000 or even $1,000,000 in the foreseeable future.
With such popularity in Bitcoin, came rise to other cryptocurrencies.
The creation of diverse types of cryptocurrency is part of digitalization age. With mail going from physical letters to email and people choosing to purchase things online instead of going out to a mall, everything is becoming an online experience. The adoption of cryptocurrency is a show of how the digital age is growing strong and cryptocurrency is most likely going to become a very important part of it.
Price of Crypto-Related Products/Services
As mentioned above, many goods and services have started booming in the industry. With the increase in demand and not enough supply, the suppliers could choose to set prices they deemed reasonable. With the market being in such demand, competitors started to join, leading to an increase in supply. With supply being able to keep up with demand, a supplier would need to decrease their price in order to keep/capture customers. This is part of the economic cycle which in the long run makes the company get to a breakeven price point.
Barriers to Cryptocurrency
With the inability to fully control the cryptocurrency, the government’s only option is to adopt this trend and create ways to gain control back or take advantage of it. Some governments are still opposed the adoption of cryptocurrency, such as the Chinese government, but others such as the Canadian government and Seoul, the capital city of Korea, are looking at ways to take advantage of cryptocurrency.
The banking system initially was against the idea of cryptocurrency but in recent news, IBM has invested $140 Billion into central banks, trading platforms, and large corporations to understand how cryptocurrency can be cost saving and also help generate profit. With IBM’s investment, this would most likely change how the bank views cryptocurrency.
With more and more individuals investing in cryptocurrencies, companies are starting to accept/adopt cryptocurrency in order to become the first adopters in the market; by being the first adopters, they would be able to capture more of the market.
Such examples can be seen below:
Kakao Talk, the biggest instant messenger app in Korea announcing the creation of the Ground X division. Ground X, a subsidiary of Kakao, will be developing a blockchain platform to be released within one year. Alongside the development, Ground X will also be looking into the integration of blockchain services into their current offerings.
L’Operaoi, a major car dealership in Japan, announcing their partnership with bitFlyer; one of the biggest crypto exchange companies in Japan. The partnership will allow Bitcoin owners to purchase cars worth up to 100 million yen, equivalent to $1,000,000 USD. This payment system will be initially tested in Aoyama, Nerima, and Setagaya in Japan; but will be expanded to other locations if proven profitable/successful. This partnership is being closely monitored by other auto industry companies to see how profitable it is to start allowing users to pay for luxury goods in cryptocurrencies. If this partnership proves to be highly profitable, other auto industry companies might follow suit and start accepting Bitcoin and other cryptocurrencies.
MiningSky, being a major player in the full-service solution for crypto mining, had the following response when we inquired where they see the cryptocurrency market in 5 years:
I believe the crypto market will take a prominent role in everyday transactions. Just as one uses the dollar or peso, one will have the option to use cryptocurrency as a mode of exchange in everyday markets. I see blockchain as a technology becoming a useful technology in all modern markets. From healthcare to finance, we will see it applied to all assets of society. – Robert Mullaney, VP of New Business at MiningSky
I believe blockchain and crypto technologies will be incorporated in everyday international business trade. The idea that banks and money are only open 5 days out of the week (not on the weekend) is something that will be changing in years to come. Revolutionary technologies take time to incorporate into society. Think about the taxi cab driver perspective before the years of uber, the post office before the times of email, blockbuster before the times of Netflix, and the list goes on. – Saba Golshan, VP of Partnerships at MiningSky