Hi everyone, I think we have to keep in mind ETH and cryptocurrencies are also bought and sold by small investors and anyone who did not invest before. This makes it a different beast altogether than traditional investments as parameters in play here are abundant and global. Because this is essentially a new way to invest for a lot of people, and is happening throughout the world, especially in Asia which has a huge population, we have to firstly regard it as a new technology than just a digital form of currency. With Japan surpassing US in crypto trade and South Korea launching the fastest growing exchange so far, it’s not hard to imagine ordinary people fuelling the crypto-movement. The fundamental concepts behind cryptocurrencies allow regular people to quickly invest and make good profit without paying tax, and governments can’t do much about it at the moment. Since some big names are also invested in either the technology behind or the currency itself, it would be hard for any government to simply rule them out.
It is a similar story to ride-sharing. When Uber made its way into new countries, eventually they realised its best to allow and regulate it. Governments will be happy as long as they can get a slice themselves.
With all this massive investment so far, businesses will not risk to miss out. And soon, you will be able to use cryptocurrencies as regular cash accounts with something similar to debit cards. This is where its the real value lies.
People who say it is worthless because it is not backed up by anything don’t actually realise that everyday currencies aren’t also to most parts backed up by anything. Sure there are reserves but not enough to cover even the 10% of the whole money in circulation. House prices, businesses etc are rarely one to one with their actual value.
As the block chain technologies behind crypto, particularly Ethereum find an application in daily use, this will add confidence that the system works. Already, any new development in Ethereum blockchain technology seems to make investors think that its value is proven and it will only go up. Although this is not strictly true, it doesn’t matter as the people’s conception makes it true in a sense, which in turn fuels further investment. When people hear a government is going to use Ethereum blockchain for voting or Nike for validating authenticity of their shoes, people are going to buy ETH. When lightning networks rolls out, I think it will trigger a similar buying incentive.
I expect this trend to go up albeit a little slower than expected. Once a few major world governments start taking cryptocurrencies seriously, these currencies will become mainstream. You can see this already happening as reserve banks started to accumulate these currencies. Once it’s official, gradually say goodbye to 1000% returns as the prices will begin to stabilise but I don’t expect a big correction or a massive burst.
In terms of comparison, I think ETH has the biggest potential among the cryptocurrencies. Its price is still relatively cheap and hence it captures the interest of new investors as they see the growth potential that they cant see in BTC, and it’s also big enough to exhort confidence. Slowly, this trend will weaken BTC as money begins to flow into ETH. My rough estimate - and it’s nothing more than that - is that ETH will hit 2500-3000 at the end of this year but it will be a bumpty ride. I consider $1400 -1500 ETH/AUD a good topping up point.
Also keep in mind that BTC as the front runner of the bunch is more susceptible to news in a bad way and is likely to be affected so, since its price is already considered high. As a result it will soften the blows for less mature currencies such as ETH, which makes it a less risky investment for me but I keep holding on to my BTC. Still, I’d be looking for good opportunities to transfer it in chunks to ETH.
Hope this helps anyone, and as always, do your own research.
