The all-mighty Bitcoin has seen a rise of 1,250% in 2017, but trouble may be ahead as rivaling cryptocurrencies are now quicker and cheaper.
“Bitcoin is slow and expensive and its market share is being eroded by cryptocurrencies that are quicker and cheaper”, says Gamaroff. Gamaroff initially created Centbee to be a Bitcoin wallet before a user-activated fork made Bitcoin Cash in July 2017.
Roger Ver, an early investor in bitcoin-related start-ups and CEO of Bitcoin.com, thinks that Bitcoin Cash had a greater change in succeeding to be a peer-to-peer electronic cash system than Bitcoin. He said in a recent blockchain summit in Hong Kong that the high fees and slow speed of transactions will eventually weaken Bitcoin’s adoption and market value.
In the meantime, Bitcoin has seen a surge in its value of 1,250% in 2017, reaching a market cap of $200 bn. This lead “How to buy Bitcoin” to become Google’s third-most searched “how to”.The wave of interest the cryptocurrency has generated and what it means has gotten many in the economy industry worried.
Farzam Ehsani, blockchain lead at Rand Merchant Bank (RMB), thinks that cryptocurrencies will emerge from “the nascent stage of being at the fringe”.He goes on to say that “There isn’t any central bank or financial institution that isn’t thinking about this and what it means for our economy.”
Ehsani expects more regulation of cryptocurrency exchanges, as well as of intermediary platform for cryptocurrencies and regular, fiat currencies. Regulators will be kept busy though. There are more than 1,000 alternative digital currencies to bitcoin, commonly known as „alt- coins”. The most known are Litecoin, Bitcoin Cash, Monero, Cardano, Neo and Ripple.
Ripple’s digital currency XRP had an 35 000% increase in 2017, with a market value of $78.9 bn. In the early months of the year 2018, CNBC reported that when XRP hit a $3.84, its co-founder Chris Larsen became one of the five richest people in the US on paper.
Monero (XMR) a “private digital currency” that uses “stealth addresses to obfuscate the origins, amounts and destinations of all transactions”, has had an increase of 2,300% in 2017 and is trading at $379.
Ehsani thinks that there is a great change that a large increase in market value will occur among cryptocurrencies. But at a total value just over $700bn, they currently remain a small asset. At the same time, many cryptocurrencies were “tremendously overvalued”.
Meanwhile, chief investment officer at Credo Wealth, Deon Gouws thinks that cryptocurrencies are too abstract to be part of a portfolio with a wealth preservation focus.
“Most cryptocurrencies we see launching today are likely to fail, but there’s still a lot of money to be made if you can identify the long-term winners successfully and early,” said Gouws, who has a personal interest in cryptocurrencies. I also believe the identity of such future winners is unknowable today”, said Gouws.
In January 13, 2018, it was reported that Bitcoin was so profitable that should the cryptocurrency fell by half, miners would still make a profit. According to Bloomberg New Energy Finance analysts including Sophie Lu, will remain profitable as long as its share price remains more than $85.67.