Even the most stubborn Bitcoin investors can’t deny that the most popular cryptocurrency in the world had a tough year in 2018, with Bitcoin’s value dropping to low $3,000 and many members of the crypto community losing belief in what they thought to be a world-changing technology. However, there are at least 5 reasons why Bitcoin’s future is bright, and the current price rally isn’t among them.
In its State of Blockchains Q3 2018 report, UK based venture firm Outlier Ventures states that capital investments in the blockchain space up 316% from 2017. Apparently, 119 venture capital deals were disclosed in the third quarter of 2018 alone, and they included companies like Amazon, Western Union, IBM, and Boeing.
According to a survey conducted by Finder, an online comparison service, 16.3 million Americans own some cryptocurrencies, and the number of Bitcoin wallets is growing at a rapid rate. In fact, there are now 48% more Blockchain Inc. wallets than there were in 2018, and 1,000,000% more than there were in 2012.
One of several things driving the above-average growth is the increasing embrace of Bitcoin on the African continent, which is infamous for its undeveloped banking system. Bitcoin allows Africans to easily avoid dealing with local financial institutions when funding businesses or paying for goods and services.
Other emerging markets where the adoption of Bitcoin is still far away from its peak include Philippines, Taiwan, Thailand, Brazil, Chile, Colombia, Hungary, Poland, Qatar, Russia, South Africa, Mexico, Peru, Czech Republic, Egypt, Greece, Turkey, UAE, China, India, Indonesia, Korea, Malaysia, and Pakistan.
Adena Friedman, Nasdaq president and CEO, believes that Bitcoin “could still be a global currency of the future.” She argues that governance and regulatory clarity are two key ingredients to establishing a practical utility and a more stable value.
“While this year will be another proving ground for cryptocurrencies, we believe digital currencies will have a role in the future. The extent of its impact will depend on the evolution of regulation and broader institutional adoption,” she said.
The good news is that the entire cryptocurrency industry is working with lawmakers around the world to adopt appropriate regulation, and there are many countries that already have put in place the necessary regulations to legitimize Bitcoin and other cryptocurrencies as alternative payment methods.
Venezuela is currently experiencing severe economic collapse and political crisis, with hyperinflation reaching devastating levels. While some Venezuelans have resorted to barter, the younger generations have switched to Bitcoin.
“I don’t own bolívars [Venezuela’s official currency]. I keep all of my money in bitcoin. Keeping it in bolívars would be financial suicide,” said Carlos Hernández, a Venezuelan living in Ciudad Guayana. Bitcoin and other cryptocurrencies allow Venezuelans like Carlos Hernández to effortlessly bypass the currency exchange restrictions in the country that the Venezuelan government has been upholding to prevent its citizens from accessing the international market.
And it’s not just people who live in countries with oppressive regimes who understand the benefits of having a currency with no barriers to entry, no regulation, and no political boundaries. American venture capital investor and billionaire Tim Draper predicts that the global economy will inevitably switch to cryptocurrency, and he believes that Bitcoin is most suited for the job.
“I tend to move my dollars into bitcoin, because I think, well, why would I want this currency that's tied to some political force when I have a currency that is going to be frictionless and global? I would much rather have a global currency than one that is sort of tied to a political force," he said.
Most Bitcoin investors have no idea just how much the technology behind Bitcoin has improved over the years. It’s now almost two years since the release of the 1.0 spec for Lightning and the verification of interoperability among the three Lightning teams. The Lighting Network allows for instant bitcoin transactions, improved scalability, and lower fees, and it’s one of the most important updates in Bitcoin’s history.
Thanks to the Lighting Network, it’s now possible, among other things, to perform the so-called Atomic Swaps, which are basically the exchanges of two different cryptocurrencies without the involvement of a third party. Atomic Swaps could completely revolutionize the money transfer system in the crypto world, making centralized exchanges obsolete.
There are many other Bitcoin improvements currently being worked on by Bitcoin core developers, and many of them help increase the upper limit of Bitcoin transactions, which is essential for making Bitcoin a suitable alternative to Visa and Mastercard, two largest corporations facilitating electronic funds transfers throughout the world.
Draper is a great example of a large investor that knows how to play the market. During crashes, Draper and other whales like to situate themselves in positions of power so they can continue to acquire Bitcoin as panic sets in and Bitcoin is liquidated in large numbers. Indeed, smart investors don’t sell when the market is in shambles. They patiently wait for the right opportunity to strike while taking advantage of discount prices.
It is widely believed that some of the largest Bitcoin investors are still holding and waiting for Bitcoin to exceed its all-time high of around $20,000. These investors will likely never liquidate all their crypto assets because they believe that cryptocurrency will one day be more popular than fiat currency.
In this article, we’ve identified 5 reasons why Bitcoin’s future is still bright despite the current bear market. From its growing adoption to the numerous improvements Bitcoin developers have implemented over the years, there are many reasons why Bitcoin is still the most popular cryptocurrency in the world over a decade after its initial release.