For some, there is a convincing reason to believe that 2018 may be a landmark year for cryptocurrencies. However, in a previous post here on Invest It Wisely, we’ve touched on both the potential and potholes of these digital assets. There continues to be lot of suspicion and scepticism that surround the new type of digital currency. It is always best to be aware of the latest cryptocurrency information, and in this post we look at the cryptocurrency market in 2018.
Investing in cryptocurrencies has always been risky, with the value of the currencies being very volatile. This year could add another reason for investors to avoid cryptocurrencies, as a report on Yahoo Finance states that 2018 may be the year of a cryptocurrency crime wave. Hacking has been part of the industry since it started, and the same report notes that between 2009 and 2015, the U.S. Department of Homeland Security determined that 33% of Bitcoin transactions had been hacked. Naturally, the more seemingly lucrative and successful these cryptocurrencies become, the more they are exposed to a much greater risk of being compromised by cyber-criminals. With an increased number of people aware of and investing in cryptocurrencies this year, so to have the risks of being hacked increased.
Aside from being susceptible to the threat of cryptocurrency heists, the industry offers no real insurance to investors. This means that revenues, when hijacked and stolen, can never be retrieved again. While supervisory initiatives are set up for the security of investors, these steps may simply not be enough to warrant peace of mind. However, despite the increased risk this isn’t stopping some investors.
The price of cryptocurrencies has taken a hit since 2018 started, and some predicted that cryptocurrencies had run their course. However, despite Bitcoin hitting a low of $5,920 (£4,231) in early February, many experts believe that 2018 will be the year Bitcoin will hit $100,000 (£71,479). Kay Van-Petersen, who forecasted in December 2016 that Bitcoin would reach $2,000 (£1,429) in 2017 (the cryptocurrency far exceeded expectations), believes that in 2018 the cryptocurrency would hit between $500,000 (£357,395) and $100,000 (£71,479). If this does happen expect another boom in the cryptocurrency market.
Forbes believe that in 2018 cryptocurrency will be used to buy gold as investors look to convert their digital investments into physical ventures. The reason for this shift is due to the volatile nature of cryptocurrencies, which can lose all its value, compared to physical assets such as gold, which will always have a value. Some forecasters warn that while using Bitcoin to buy gold is a good way for investors to diversify their portfolio, it could lead to a cryptocurrency bubble.
FXCM highlights that gold remains at the forefront of many investor portfolios and has resiliently stood the test of time, from eras of war and turmoil to periods of peace and prosperity. Additionally, gold still is the most liquid of all assets that is traded on a daily-basis around the globe. In fact, the London Bullion Market Association reveals that up to £13.8 billion worth of physical gold are transacted and traded in London alone. Cryptocurrencies do not have the same security, which is why using cryptocurrency to buy gold could be one of the leading market trends in 2018.
If 2017 was the year cryptocurrency became a viable financial option, 2018 will be the make or break year. With increased risk, and the potential for more profit, investors will be following 2018 very closely.