This Is Why The Crypto Scene Is Worth Your Consideration
Cryptocurrency Market Outlook
In December 2017, cryptocurrency market capitalization hit all-time-high of 600 billion USD, and this hit the headlines in the global financial market. Since then, like other tradable investment, cryptocurrencies have seen highs and lows.
Despite the ups and downs in the market, many investors around the world made a stake in the emerging world of these wonder coins and tokens.
Major financial market players like JP Morgan have bided their time, and just at the dawn of 2019, the JPM cryptocurrency was unveiled to the world.
With all the buzz it has generated in the last two years, there is clearly a direction appearing in the horizon. So the question remains: How is the cryptocurrency market doing? Is there any future to it?
Why the stock market parallel works
The reason that the cryptocurrency market is viewed as a parallel to the stock market is simple: people view it as an opportunity to make gains, use it as an investment and reap rewards. Closely aligned to these, increasingly, people are using crypto as a store of value, more than anything else.
In talking about value, there is a sense as to how this works. The meteoric rise in bitcoin price to a high of $20,000 in 2017, is a pointer. The reports on the impressive run witnessed by bitcoin made the headlines around the globe.
This was not for nothing. It is novel to see a stock spring in market price from $900 to $20,000 in a year.
A Reason For Optimism
Amid the uncertainty that bedevils the global economy from time to time, (majorly from political standoffs between nation) a neutral store of value in the semblance of gold looks attractive.
Cryptocurrencies have this allure, and in the US-China faceoff early in 2019, the push towards fiat alternatives was evident in the global markets.
Cryptocurrencies witnessed a noticeable rise in market price as global markets faced uncertainties. And this explains why the market capitalization index rose beyond the $342 billion mark.
Projected Growth in Market Value
As of December 2018, total market cap was 135 billion USD, and this surged to more than 342 billion USD by July 2019.
The appreciation is over 250 percent, and If this growth rate continues year-on-year, we could have the following market cap for the next three years:
July 2020=855 billion USD
July 2021=2,137 billion USD
July 2022=5,434 billion USD
The market cap as of June 30, 2019 is shown here:
Cryptocurrency market capitalization -June 29, 2019
These are the yearly positions for the last three years:
Total Market Capitalization-2019
Total Market Capitalization-2018
Total Market Capitalization-2017
Crypto Vs. Gold
Other than stocks and real estate, valuable metals are also commonly used by people as a vehicle to protect their investments. Endearingly, their values remain mostly stable, that’s not seen as a downside – in fact, stable value is the upside in this case.
While fiat currencies and stocks can lose value, the world market for gold or silver generally stays the same– and in some cases, prices can even go up during a recession. That makes it the prime investment for those trying to protect their wealth against loss of value.
But can bitcoin take the place of gold now? Unlike fiat money, cryptocurrency circulation is limited. As such, inflation isn’t much of a thing there. And unlike gold, you won’t worry about physical storage, since they’re virtual.
This has led many people to consider whether holding cryptocurrencies, particularly bitcoin, instead of gold, is a wise idea.
The truth is, it is a plausible prospect. While the metals market is stable, the crypto market isn’t. In that regard, buying cryptocurrencies is a lot more akin to buying stocks.
Why you will enjoy price stability with gold, bitcoin, and the likes will give the greatest value appreciation.
There’s no doubt that there’s a real prospect for cryptocurrencies and an avid investor will recognize this. As mass adoption happens, the expectation is that the market will bloom, at least for most tokens.
In following the market trajectory so far, it is obvious that a pattern similar to stock market-traded securities is discernible. Seasons of highs and lows, as well as sideways and jigsaw movements are documented. The point is clear-it is a market in the making, and this cannot be ignored.
In terms of market volatility, cryptocurrencies are in the front burner. A huge spike can occur in the morning and be wiped out in the evening.
As professional traders will attest, high volatility is always a signal of high returns. The greater the market risk, the higher the prospects of huge returns.
20 Most Capitalized Cryptocurrencies
A Closing Note
Right now, cryptocurrencies are in the news as an investment magnet. As such, buying them is risky – and while the risk is big, you can reap big rewards as well.
While many people think crypto is a fad, that’s not the truth, particularly now that bigger players are entering the market. For one, Facebook’s Libra is expected to debut within a year, and this is expected to take crypto to the masses.
At the same time, blockchain projects keep inching closer and closer to the mainstream. And on the legal front, crypto regulation is playing out slowly, but steadily.
For now, cryptocurrencies are great as investments, store of value, and even for speculative purposes. The likes of Ripple already have real world a real-world application as a value transfer tool. There are more expectations, and these could play out in the coming years.