Bitcoin 2018 price prediction: Is it too late to buy bitcoin?
Bitcoin became the buzzword of the financial world in 2017, rising more than 1,800%. What does 2018 have in store?
With a market cap of over US$225 billion, bitcoin is more valuable than all but 22 companies in the world. Its value is more than the GDP of New Zealand, Portugal and Greece, yet it's only predicted to grow further.
After reaching a peak price of a bit over US$19,000 in mid December, bitcoin has since dropped off to over US$13,500, but there are still many who believe bitcoin has a lot of room to grow.
We spoke to one of these people, Michael Dunworth, CEO of payments company Wyre, who gave us his tips on what he believes will happen to bitcoin in 2018.
It's all about scaling technology, not forks
"For Bitcoin in 2018 I would say it's going to be tons around scaling solutions," Dunworth told finder.
In 2017, as bitcoin started to gain wider adoption, it began to struggle with the trade volume which was occurring. As a result, we saw several forks of bitcoin attempting to fix these problems, such as Bitcoin Cash, Bitcoin Gold and Bitcoin Diamond.
"All these forks of it, they're all trying to say the problem with Bitcoin is that it can't scale," he said. "And basically everyone was saying that bitcoin's useless because it's too busy."
However, just because bitcoin got caught up with trouble scaling, doesn't fundamentally mean it is bad technology with no future.
"But that's like saying a restaurant is useless or a restaurant is terrible because the line is too long to go in," Dunworth added. "If you've ever been to Messina ice cream, the line's always huge because Messina's the bomb."
2018 will be about SegWit and Lightning Network
Lightning Network is seen by many as the solution to bitcoin's scaling problems, as it works with the original bitcoin and isn't a fork off it.
Lightning, at a very simple, high level works kind of like the internet itself.
Rather than wait for mining pools, to pick up a transaction and then queueing it into the blocks, Lightning works by using a combination of smart contracts and channels. So like the internet now, money is transferred by bouncing channels like a connection to a website bounces around like IP traffic, and then verifies the transaction using a smart contract.
"Lightning Network is bitcoin core, the original bitcoin, and it is their solution to scaling," Dunworth said.
"instead of saying 'all right we're just going to make the block size bigger' what they said is 'no we don't want to do that, we want to take a more technology-based approach instead' and improve the tech."
He says that last year's solutions of increasing block size are like a short-term band-aid solution, and similar issues will keep occurring as bitcoin's popularity continues to increase.
"Lightning Network basically says no, instead, we're going to take two steps backwards, which means we're slower to fix the problems scaling, but we can go a hundred million steps forward as a result," he added.
How high can bitcoin go?
While bitcoin dipped towards the end of 2017, Dunworth believes it still has a lot of room to grow. By the end of 2018, he believes it could hit as high as US$50,000 per coin, while restoring itself to around US$16,000 by the end of February.
However, a big factor for this will be if the SEC, as many predict, allows ETF trading of bitcoin.
"SEC will move in and greenlight the ETF this year," Dunworth said.
"If that doesn’t happen, it’ll be around US$8,000. If it does happen, it’ll be US$50,000+."