“It’s the next big revolution, just like the internet was.”
“No… it’s a bubble!”
Love it or hate it, cryptocurrencies have now grown to a point where they cannot be ignored. The CBOE and CME have launched their own cryptocurrency futures , the SEC and CTFC have gotten involved , and pretty much every mainstream publication that matters discusses cryptocurrencies one way or the other every day.
In other words, cryptocurrencies are here to stay — at least for the foreseeable future.
What cryptocurrency trends should you watch out for, though. What will drive the cryptocurrency landscape in the foreseeable future? Below are four trends to watch out for: More stablecoins and increased market stability
The cryptocurrency market has survived a lot of things: major exchange hacks , involvement from the US Securities and Exchange Commission (SEC), ban on cryptocurrency ads by Google, Facebook, Twitter and other online giants, and unpredictable government intervention and attempts at regulation.
All these factors have in some way been responsible for a massive correction in cryptocurrency market cap, from an all-time high of over $850 billion in January to about $260 billion at the time of writing this.
Amidst these events many experts, renowned economists, and pundits have declared the death of cryptocurrency . But it hasn’t died.
However, many experts agree that one factor could finally deal cryptocurrencies a fatal blow: the stablecoin Tether .
Most cryptocurrencies are pegged to Bitcoin and, due to Bitcoin’s huge price swings and volatility, this affects the prices of other cryptocurrencies. The idea behind the stablecoin is to have a coin with a fixed price that isn’t subject to sudden price swings. This “stablecoin” is then pegged to, and backed by, actual fiat currency to guarantee its stability.
The most notable of all stablecoins is Tether, and most exchanges now pair every major cryptocurrency — and some smaller altcoins — to Tether’s USDT which is equal to a dollar.
This is generally supposed to be a good thing, because, due to being backed by the dollar, pegging a cryptocurrency to Tether makes it more stable than pegging it to the more volatile Bitcoin. Well, this should be the case assuming that Tether is actually indeed backed 1:1 by the dollar as is generally assumed. H owever, damning reports to the contrary have emerged.
It’s been speculated that Tethers are often printed out of thin air in response to market conditions in order to manipulate cryptocurrency prices. It’s also been alleged that about 48.8 percent of Bitcoin’s price rice occurred within hours of new Tethers being released. In other words, there is strong reason to believe that Tether has been released severally in order to manipulate Bitcoin, and consequently cryptocurrency, prices.
Now, this piece isn’t about Tether per se. Several sources like Tether Report and Bitfinexed provide more detailed and logical information on the subject. The problem lies in Tether being the major stablecoin cryptocurrencies are pegged to: Tether’s USDT is recognized and used by every major exchange, and Tether has the second highest volume of all cryptocurrencies after Bitcoin according to data from CoinMarketCap.
Due to this high dependency on Tether, any revelation of questionable activity could send cryptocurrency prices crashing — with many experts predicting an up to 80 percent price crash for Bitcoin.
The good news, however, is that the introduction and proliferation of more stablecoins, and less dependency on Tether will reduce the potential after-effects should Tether be revealed to be a sham and ensure more market stability in general. Bitcoin dominance will increase
Bitcoin is undoubtedly the king of crypto — when it sneezes, altcoins catch the cold.
However, cryptocurrency observers would have noticed a trend in which Bitcoin dominance has slowly been eroding — at 38 percent at the time of this writing, Bitcoin dominance is at one of its lowest points ever. This is a far cry from the 87 percent it started January 2017 with.
Despite the sharp decline in Bitcoin dominance, it will only go up from here. In fact, I won’t be surprised if Bitcoin dominance increases to 50 percent or more in the nearest future.
There are a few key reasons why Bitcoin dominance will increase:
1. Despite Bitcoin’s volatility, it has been more stable than other major cryptocurrencies . Research from the BlackRock Investment Institute found that Bitcoin is significantly less volatile than the next two most popular cryptocurrencies — Ethereum and Ripple.
Just take a look at the chart below:
The fact that Bitcoin is generally less volatile than other cryptocurrencies, and Bitcoin’s synonymy with cryptocurrency to the average new investor, will further drive its market dominance.
2. Many of the scaling issues plaguing Bitcoin are being addressed thanks to fixes like SegWit and Lightning Network . Perhaps the biggest threat to Bitcoin’s dominance is its scalability issues; d...