2016 was a year full of technology innovations and improvement, but that aside, it was tough. UK decided to take a step back in immigration and forget about free trade by voting themselves out of EU. US... The mighty United States of America. They voted a president who has already created a tremendous amount of tension. And for a reason. That's definitely a topic of it's own. It wasn't a walk in the park for BRIC countries either; Brazil with corruption, Russia with Crimea, India with demonetization and China with inefficient loans. On top of that, the Middle East continued flaming. So yes, 2016 wasn't pretty.
And it seems these problems aren't letting go in 2017. Major currencies are going to tumble this year. How shall investors react? Some move towards the chemical element Au, also known as gold. But the risk takers will seek for market inefficiencies and drive attention to digital assets like Bitcoin (click here if your not sure what Bitcoin is!) that will gather a significant segment of investors, lifting Bitcoin to double it's market cap.
The current market cap of Bitcoin is around $15bn. China has a new billionaire every five days, Saudi's, well we know they are pretty well off. These countries could put this kind of money together in a matter of hours. Literally.
We are talking about the classic financial market terms; flight to quality, clientele effect, reaching for yield. All of these in the same asset. Bitcoin. Year ago, Bitcoin was only the currency used in drug deals or in the dark web. Well, it is not anymore. Things change, and they change rapidly. Faster than ever.
I'll list ten predictions that are going to effect the value of Bitcoin in 2017:
1. Hyperinflation in Zimbabwe and Venezuela(Bitcoin is not participating in this economic war, thus it's not a victim of national attacks through the use of their currency)
2. Bitcoin will become increasingly accessible to investors via ETF's, resulting in more and more capital injected to the currency
3.Blockchain technology will be widely tested in financial services, especially in cross-border payments (even the former CEO of Barclays has appointed to the board of Blockchain.info)
4. Adoption of blockchain will increase in healthcare, identification and supply chain management
6. Higher acceptance of Bitcoin in e-commerce and brick-and-mortars
7. The hype of startups utilizing Bitcoin will decline and the real gems are discovered
8. High transaction growth in Asia (mainly Japan and India)
9. U.S. budget deficit of $1 trillion will force the Federal Reserve to hike interest rates and push the dollar to new highs (euro parity with dollar)
10. Higher adoption of Bitcoin in Chinese and Russian banks (replacing U.S. Dollar)
What will happen?
Well, no one knows. Life isn't this easy. But I'm bullish about cryptocurrencies (Bitcoin playing the major role here) and the blockchain technology. I believe a decentralized currency is the future. It's the money of the internet. It's the product of the system we use daily, without any central authority. That's how the world works nowadays. Markets decide. What's your call?
(24.01.2017) Bitcoin price $907
(31.12.2017) Bitcoin price $2000*
*The prediction of Bitcoin value is a pure estimate. This is not a sure way to double your money. Remember, you can lose a significant amount of capital in this investment. Don't invest anything you are not willing to lose.