Bitcoin, the “peoples” currency, is expected to regain its
market dominance in the cryptocurrency markets by the end of 2019. In terms of
market capitalization, that is.
That’s according to a recently published A.T. Kearney
report. “By the end of 2019, Bitcoin will reclaim nearly two-thirds of the
crypto-market capitalization as altcoins lose their luster because of growing
risk aversion among cryptocurrency investors,’ says the report. “More broadly financial regulators will
soften their stance towards the sector.”
Then there is the growing complexity of altcoins. “Our
prediction that Bitcoin will regain its dominance is supported by the
ever-growing complexity among altcoins, most recently demonstrated by the “hash
war” that occurred in the Bitcoin Cash ecosystem,” explains Courtney Rickert McCaffrey manager of
thought leadership in A.T. Kearney s Global Business Policy Council.
“Additional “hard forks” and the continued lack of consensus among developers
about a path forward will further widen the chasm between Bitcoin as the most
accessible and widely recognized cryptocurrency and the altcoin community.”
That doesn’t mean that all altcoins will go away. “Some
survive and grow up to be explosive enterprises, that have real products and
generate real and substantial revenues. altcoin will follow somewhat that same
pattern,” Steve Russo, Executive VP Eclypses. “Those that are whimsical and
have no real value will vaporize, while the real ones will not only survive, but
thrive over time. “
Bitcoin had a bad year in 2018. The digital currency lost
73% of its value, dragging down the entire cryptocurrency market.
There are several reasons for that. Like the proliferation
of altcoins, which expanded the “horizontal” supply of cryptocurrencies.
Then there’s the lack of transparency in Initial Coin
Offerings (ICOs). It has turned the
cryptocurrency markets into a modern day “wild west,” scaring investors away.
And there are the persistently low adoption rates. In spite
of the buzz generated in social media, Bitcoin adoption has been growing
slowly, as evidenced by a recent Gallup survey.
This means that Bitcoin remains an exotic currency for the
“innovators” and the “early adaptors,” yet to reach the “mass majority.” That’s
when a new product crosses the “tipping point,” according to marketers.
But there’s one more reason behind the decline in Bitcoin’s
value in 2018 -- rising interest rates.
They cooled-off speculation across all markets.
Still, things can turn around for 2019. A softer regulatory
stance could pave the way for the long-awaited launching of Bitcoin Exchange
Traded Funds (ETFs) and could allow a broader investor participation and give a
boost to the digital currency.
That’s “ironic,” according to the A.T. Kearney report.
“Ironically, for cryptocurrencies to see a third decade, the only viable path
forward involves this acceptance by the international financial system that
Bitcoin once sought to defeat.” Meanwhile, a pause in interest rate hikes could bring back
investors to the Bitcoin market.That’s what Bitcoin bulls need after a dismal 2018.
No comments
Post a Comment