Experts told CNBC that cryptocurrencies could go on a bull run greater than in the last year and pass the trillion-dollar mark, regarding value, following a recent violent sell-off across digital coins.
Bitcoin has seen a huge fall recently, falling below $6,000 for the first time since the middle of November.
On Wednesday, it was also trading above the $7,000 level, as the cryptocurrency market has been stabilized.
At its weakest point on Tuesday, the total digital currency market saw over $550 billion cleared off its value. But, industry insiders see another rally ahead.
The head of APAC business development at cryptocurrency exchange Gatecoin, named Thomas Glucksmann, told CNBC by email on Tuesday:
“Increasing regulatory recognition of cryptocurrency exchanges, the entrance of institutional capital, as well as the major technology developments will contribute to the rebound of the market and push cryptocurrency prices to all new highs this year. There is no basis why we could not see bitcoin pushing $50,000 by December.”
The technology advancements Glucksmann referenced include the so-called Lightning Network of Bitcoin, which would boost the very slow transaction speeds by using cryptocurrency.
“One of the possible appetizers for the bulls or the catalyst for the recovery is going to be the announcement of another cryptocurrency backed instrument which will be listed on a major exchange. There are also some candidates in the pipeline; it is only a matter of time until we have a cryptocurrency backed ETF (exchange-traded fund).”
In 2017, the CME and CBOE both released bitcoin futures products which people could trade. And Nasdaq CEO Adena Friedman told CNBC in an interview from recently that the exchange was “continuing to investigate” cryptocurrency futures.
There is still not a bitcoin ETF or exchange-traded fund on the market. An ETF tracks the price of an asset and would permit people to trade bitcoin without having to purchase the digital currency on an exchange.
Noted cryptocurrency investors Cameron and Tyler Winklevoss, the brothers who are the founders of the Gemini Trust digital currency exchange, has an ETF application rejected in 2017.
‘Crypto winter’ is coming.
The cryptocurrency sell-off from recently came after huge price rises for many coins in 2017. Bitcoin was up nearly 1,300%, while ethereum rose over 8,000% and ripple surged over 32,000%.
Even though the rises of the price were massive, some experts think that this year they could be bigger.
Jamie Burke, the CEO at Outlier Ventures, a venture capital firm that focuses on blockchain technology investments, told CNBC by email on Tuesday:
“We believe that after February the market is going to likely go on a bull run comparative if not greater than last year potentially reaching the trillion-dollar mark before a proper crypto sets in where the market becomes more focused on proper market fundamentals.”
‘Utility tokens’ to watch.
A lot of commentators have noted that bitcoin and other cryptocurrencies have no fundamental value.
But, some other have suggested that digital tokens such as ethereum, which can be used to build new blockchain applications, could have some value in the future as the industry will move forward and develop as well.
Some of the companies such as IOTA and NEO are trying to create blockchain platforms which developers can build on. Such applications can be powered by IOTA or NEO tokens. This is also true for ethereum.
Mick Sherman, who is the co-founder and CEO of Hercules Tech, a data science company that focuses on blockchain and big data, said that these are the digital coins which could see their prices appreciate the most this year.
He told CNBC in an email on Tuesday:
“Utility tokens, as well as assets with a working platform and a clear-cut reason for requiring both a blockchain and their token are more likely to appreciate in value in 2018. Some of these crypto assets will not be used for years, which means that they have no utility value.”
The CEO warned that a lot of the blockchain projects could be years away and more bubbles could arise.
“The revolutionary nature of blockchain technology is what is pushing the hype, and although we may be years away from viable blockchain-based assets, we may probably very well see several more bubbles.”