After a massive crash at the beginning of the year, it appears as if Bitcoin and Ripple are beginning to bounce back – but the future of cryptocurrency is anything but guaranteed.
It has been a rough couple of months for cryptocurrencies across the board. Bitcoin and Ripple saw record highs near the end of December, which led many first-time investors to enter the market in hopes that they could capitalize on the rapid climb of these new investment opportunities. It appears as if the bubble burst, however, with a massive crash over the course of just a few weeks. The value of Bitcoin and Ripple changes multiple times a day based largely on market speculation, but it appears as both of the currencies are starting to climb after a recent low last week.
The value of Bitcoin and Ripple is extremely volatile due to the design of cryptocurrency by default. As mentioned above, the two currencies have a price that changes based on market speculation and can rise and crash based off of events ranging from rumors to increased regulation. A combination of the two have crippled the cryptocurrency industry in the last couple of months, and Bitcoin and Ripple were no exception. We seem to be seeing the two currencies bounce back and experts believe we could see an overall increase in 2018, but the future of the two currencies is anything but guaranteed – especially considering the political environment that we find ourselves in.
At this year's Sohn Investment Conference, Dan Sundheim, the founder and CIO of D1 Capital Partners, spoke with John Collison, the co-founder of Stripe. Q1 2021 hedge fund letters, conferences and more D1 manages $20 billion. Of this, $10 billion is invested in fast-growing private businesses such as Stripe. Stripe is currently valued at around Read More
Cryptocurrencies have thrived based on the lack of regulation and the anonymity and security regarding financial transactions and transfers, and both of those aspects are being threatened around the world. With a market cap in the hundreds of billions, Bitcoin and Ripple, as well as the 100+ other cryptocurrencies, are becoming too big for the financial industry to ignore. These new types of investment are different from anything the financial world has ever seen before, and so far we haven’t seen any sort of major regulation in the way we see traditional stocks and other forms of financial transactions affected. That may soon change, however, with multiple governments and regulatory agencies from around the world starting to express concern over the lack of control over the rapid spikes and crashes of Bitcoin and Ripple.
Bitcoin, in particular, has been the target of many governments’ ire. As the largest cryptocurrency and the most recognizable by far, it’s the perfect target for regulatory bodies seeking to exercise some control over these uncontrollable fluctuations. Recently leaked documents from China suggest that the country may soon start raising taxes on Bitcoin and Ripple miners – a major problem for the numerous crypto mining companies that call Asia home due to the low utility costs. This is yet another nail in the coffin of the Chinese cryptocurrency scene, with the recent shuttering of a major cryptocurrency exchange and the banning of Initial Coin Offerings. South Korea, another Asian country with a major cryptocurrency presence, has also introduced regulation requiring that people within the country trade in cryptocurrency using their real names – a blow to the anonymity of the investments. While these changes are due to security concerns, they no doubt have had an effect on the price of Bitcoin and Ripple and have negatively affected their recovery.
Other countries that have expressed concerns over the lack of regulations with currencies such as Bitcoin and Ripple include Israel and the United States. Israel has gone as far as potentially putting a halt on cryptocurrency activity within the country pending a review from their financial regulatory bodies. Multiple agencies within the United States have also stated that there are inherent problems with the design of cryptocurrency that pose a problem for the uninformed investors who are likely to listen to media hype and try to win big with an investment in Bitcoin and Ethereum. Overall, while the price of Bitcoin and Ripple continues to rise, it’s still a far cry from where it was just a couple of months ago. Experts believe that we may continue to see the value grow over the course of the year, but if regulation continues to choke the growth of these new investment opportunities, we may never see a value that’s quite as high as we saw in December.
There is hope for cryptocurrency, however, regardless of how many regulations start to affect the trajectory. Cryptocurrencies are relative newcomers to the investment scene, and over the past few years, we’ve seen record highs and devastating lows. Some experts believe that the value of Bitcoin and Ripple will continue to rise over the coming year, and there’s certainly a possibility that that will be true. At the end of the day, however, cryptocurrency predictions are exceedingly difficult to nail down. While we’ve seen a steady rise over the last week, there’s no telling what the coming weeks will hold.