Change is inevitable as they say and cryptocurrency seems to take it to another level. This highly volatile market has historically seen some huge ups and downs and things continued the same way in 2018. Many new trends emerged while existing ones became obsolete. To get ahead of the curve, it’s important to know what’s happening and what might happen in the crypto market. Let’s take a look at some of the cryptocurrency trends that will define this technology in the coming months.
1. Increasing decentralization
The primary idea behind cryptocurrency is decentralization. This concept will not remain restricted to just coins and tokens, but will expand into other avenues.
Decentralized apps (dApps) are becoming increasingly popular. While use cases for dApps are still in their infancy, the possibilities are endless. People may use dApps for payments, lending, the tokenization of assets, insurance, gambling and so on.
Decentralized exchanges are also on the rise. Centralized exchanges defeat the purpose of decentralized cryptocurrencies. That’s why the call for decentralized exchanges has caught momentum recently. And now, big names like Binance have decided to build them. It is safe to assume that decentralization will remain one of the strongest cryptocurrency trends in the future.
2. The Role of ICOs Will Change
Initial Coin Offerings (ICOs) were a big game changer in 2017. Before that, project founders generally relied upon Venture Capitalists for funding. But that often locked assets for a long period of time before returns. With ICOs, the investors are regular retail investors. For the founders, it meant easier funding without the restrictions. This model sought to reward the early adopter and has developed tools to do so.
For example, consider the recent advent of the pre-ICO. Investors who participate in the pre-ICO get a cheaper price per coin and also a higher bonus amount. Additionally, they may get additional perks or merchandise (like how Centra gave their angel investors the Titanium card for free) or Alpha access to the software or application the company is developing.
The future may hold further improvement in the ICO model of project financing for both investors and founders.
But not all will be rosy for ICOs in the coming year. Many governments are banning ICOs due to their non-compliance with local laws. Founders might shift ICOs to other countries or become more accountable to government regulation. For better or for worse, ICOs will one of the cryptocurrency trends to keep an eye on.
3. The Wider Acceptance of Crypto
Amidst all cryptocurrency trends, none is truer than wider acceptance. Cryptocurrency becomes more popular every passing day. And this popularity is not just restricted to investors.
The two institutions primarily threatened by cryptocurrencies are banks and governments. The former is now finally realizing the potential and opening up to crypto with enthusiasm. Goldman Sachs recently announced to start Bitcoin trading. In fact, many banking institutions are considering similar forays into the space. Cryptocurrency is being accepted as a legal tender by many merchants, and even some governments are teetering on the edge of acceptance.
Take, for example, Venezuela as it became the first country to launch its own cryptocurrency when it launched the virtual Petro, backed by crude oil reserves. Then there’s the Marshall Islands which created its own digital currency in order to raise some hard cash to pay bills and boost the economy.
And let’s not forget, ‘bitcoin’ has become a buzzword around every kitchen table over the past year. So, it is safe to assume that cryptocurrency will continue to go more mainstream.
4. Bitcoin Still Going Strong
You can’t emphasize the importance of Bitcoin enough in the crypto market. There is a reason why people in the crypto industry have divided the lexicon into ‘bitcoin’ and ‘altcoin’.
The first and the most popular cryptocurrency, Bitcoin had completely dominated the growth of crypto market cap.
Every now and then, there have been speculations about its downfall. Cataclysmic prophecies like “Bitcoin is finally getting replaced by XYZ” or “Bitcoin bubble is bursting” have been thrown around casually since its inception. But it is safe to conclude that this is far from the truth. It has an innate ability to grow, develop, rise to internal and external challenges – and grow in value.
Bitcoin is the biggest and the best cryptocurrency. Perhaps most importantly it has first mover status.
Detractors of Bitcoin have criticized its limitations for scalability. But every challenge and critique is met with a robust response. With the creation of the Bitcoin Lightning Network, for example, transaction time will be reduced considerably.
Bitcoin will rule the crypto roost for the foreseeable future.
5) Platform Is Still the King
Another cryptocurrency trend which will remain consistent is the popularity of the platforms.
Let’s consider Ethereum, the most popular name in this category. In January 2017, it stood at just $8. By December 2017, it has reached $1400. How did this happen? This was largely due to the fact that the Ethereum platform launched the majority of ICOs last year.
Is the success of platforms dependent upon the ICOs? Well, not really. Decentralized apps will gain momentum in the future, but they still aren’t popular enough to become mainstream currently.
Yet, the platforms upon which they are built are still going strong. The success or failure of the dApps doesn’t affect the underlying platform, which gets a fat share of profit anyway.
While Ethereum is the most popular platform currently, many others are actors are emerging. Some of my favourites include Cardano and NEO.
Platforms are here to stay – which one will become king? Now that’s a whole other post…
Like the price of Bitcoin, cryptocurrency trends can change at any moment. New trends will emerge, but the trends we’ve discussed here are likely to have great significance in shaping the way we will use cryptocurrencies in 2018.
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