The cryptocurrency market is still forging ahead against all the odds and despite all the negative sentiment from traditional financial institutions and governments. 2017 presented cryptocurrencies with an incredible bull run in which Bitcoin recorded more than 1,400 percent gains. Other cryptocurrencies such as Ethereum, Bitcoin Cash, and Ripple also books similar or larger gains as the bulls held control of the market.
However, 2018 hasn’t been particularly favorable to cryptocurrencies in the year-to-date period. Bitcoin has declined by 35 percent, Ethereum’s ether has lost 11 percent, ripple has dropped by as much as 63 percent, and bitcoin cash has suffered a 48 percent loss. However, one of the rare rays of hope in the cryptocurrency market is coming up from EOS, a younger Ethereum rival in the smart contracts and decentralized applications segment. In the year-to-date period, EOS coin price has surged about 115 percent to trade around $18.63.
Nonetheless, it is still premature to make blanket statements about where the cryptocurrency markets could be potentially headed in the remaining part of 2018. Some people believe that 2018 will be the year of ICOs while others are worried that altcoins might be in a bubble. This article sheds light on what market experts are saying about the potential direction of the market.
Here’s What a Market Bull Thinks About Cryptocurrencies
If you are conversant with cryptocurrencies, you’ll most likely have heard about Thomas Lee, Co-founder and head of research at Fundstrat Global Advisors. A Wall Street strategist with more than 25 years’ worth of experience, he has a wealth of insight into equities research, and he has been consistently ranked by Institutional Investor every year since 1998.
Thomas Lee is an unapologetic cryptocurrency bull, and he is particularly optimistic about the prospects of Bitcoin. In a recent interview with CNBC’s Futures Now, he predicted that the price of bitcoin could reach $25,000 in the next seven months. In his words, “We still feel pretty confident that bitcoin is a great risk-reward and we think it could reach $25,000 by the end of the year.”
The reason for his bullish optimism is that he thinks bitcoin is currently oversold and a fast-paced rally is long overdue. “when you look at metrics like price-to-book, which is ‘money cost,’ or our bitcoin misery index, it’s pretty much what you saw at the end of the 2014 bear market, not the start.” He also condemns the doomsdays prophecies claiming that Bitcoin is in a bubble and he opines that the selling pressure on the cryptocurrency markets will star abating soon enough.
Here’s What a Market Bear Thinks About Cryptocurrencies
Researchers at GB Bullhound are sounding pessimistic notes of worry about the prospects of the cryptocurrency market. GB Bullhound styles itself as a leading investment banking firm that provides advice on mergers & acquisitions, capital raising and private placements in the technology sectors and it has ringside seats to events in the cryptocurrency industry.
The firm in its “Token Frenzy: The Fuel of the Blockchain” predicts total devastation in the cryptocurrency market. The researchers at the firm observe that cryptocurrencies will suffer a 90 percent correction the next 12 month and very few crypto companies will survive. The analysts noted that the seemingly endless influx of institutional investors and retail investors would be the bane of cryptocurrency investments in the short term.
The arrival of Wall Street money into cryptocurrencies will continue to push prices up, but the spike will end when there are no new Wall Street investors entering the market. Unfortunately, many of the new investors who got into the market late will be unable to book gains once there are now new institutional investors. Such new investors will trigger a selloff when they exit the market, and their exit will have a ripple effect causing more losses across the market.
It is still somewhat too early to know if the prediction of the bulls or bears will come true for the market. For one, the bulls can rest in the knowledge that fearmongering about a cryptocurrency crash has been ongoing in the last couple of years and the market is yet to crash. Bears also have a valid point in claiming that the bullish run in cryptocurrencies cannot continue indefinitely. Nonetheless, we can only agree that blockchain technology and cryptocurrencies will continue to disrupt the financial services industry and we are still in the earliest days of that disruption.
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