Bitcoin has experienced a year 2017 prolific, from less than $ 1,000 in January to a little less than 13 000 at the end of December after having experienced a peak of a little over 19 $ 500, depending on the course compiled by CoinMarketCap. A growth which has what to do to fade the S&P 500 and 20 % of earnings in 2017. But 2018 might be the year of the alts, and here’s why.
The problems of Bitcoin is of benefit to alts
The world of cryptos has sufficiently spoken, and the many forks of BTC speak for itself : Bitcoin has become slow to transfer, but also expensive. When the network is congested, you can go up to $ 50 transaction fee. Lightning Network was supposed to solve the problem, but its adoption seems more and more uncertain. As a means of payment, BTC is a solution that has less and less attractive, which has in particular pushed the gaming platform Steam to no longer accept Bitcoin as means of payment.
Some analysts believe that the future of Bitcoin as a crypto-currency could be on the side of a store of value, to endorse in any way the role of gold in the monetary system traditional. The reasoning fits perfectly the road, but who says a store of value says price stability… to the world of crypto-currencies, of course.
The quest for yield will push the alts
Any investor who respects himself is in search of the maximum return on its investment. Even if in the world of crypto-currencies, the notion of community is strong (which leads some investors to identify their assets, unique feature of this market), crypto-investor, does not develop this emotional connection with its investments. The objective is to obtain the highest yields, and it is clear that this is not a Bitcoin that we get for the last few weeks.
To illustrate this, let us look at the value of global market of crypto-currencies. Since November 2017 and it has literally exploded, jumping from about 182 billion to about $ 800 billion today. This means that the market value has increased by a factor of 4.4. If BTC has not recorded this performance, which is of course the case, this means that the alts have taken advantage of these injections of money. The current trend therefore seems to indicate that 2018 will be the year of the alts, the steady decline of the dominance of Bitcoin (Bitcoin dominance) is now well below 40 % seems to corroborate this scenario.
Innovation disruptive alts
As Bitcoin settles, or wallows say the bad languages, in its role of crypto reference and standard, innovation, disruptive knocks at the door of the technology registers distributed (DLT). After Ethereum and its intelligent contracts, here is now the emergence of crypto-currencies x. 0. They are not based on the chain of blocks, but the directed graph acyclic. A well-known example is IOTA. RaiBlocks, which has experienced phenomenal growth these past few weeks, comes on the front of the stage.
The lack of privacy also grows in the back the crypto-currencies that help to prevent any traceability such as Monero or Rod. There are also crypto-currencies “transactional” such as Ripple and Stellar, who have done more than get people talking about them recently. It is of course just some examples that tend to illustrate that competition is increasingly fierce, so that many promising projects saw the light of day, while others are beginning to demonstrate their potential in the examples cited above.
And if the institutional investors and banks are involved ?
To make me the devil’s advocate… A counter-argument would be to say that if institutional investors and investment banks to become more involved in the market of crypto-currencies (which is an argument perfectly admissible given that the rumors that Goldman Sachs would be setting up a trading desk crypto, and as more and more companies which advise pension funds and hedge funds, recommend investment in crypto-currencies to their customers), Bitcoin should be the first to benefit. It is likely, but in such a scenario there is nothing to say that those who have entered earlier in Bitcoin are not going to decide to take their profits and turn to the alts, or that this momentum will be sufficient to counter the rise of crypto-currencies side.
The index of the Bitcoin dominance is at its lowest. After falling to just over 38 % in July 2017, it bounced then in the following months, but up to 65 %, which was far short of the levels which made it the boss is the undisputed sector and which were the standard since its creation. Since then, he is back in business again on the decline, capital entering the market of crypto-currencies, taking the direction of alts rather than the king Bitcoin. BTC will recover, as it did at the end of the month of June 2017, or continue on this slippery slope ? We will soon know.