2018-11-15 05:24 |
The last year has been very negative for Bitcoin and the general cryptocurrency market in terms of price action. Bitcoin (BTC) has experienced a bear market that made it lost around 65% of its value since its all-time high. The market crashed back in January/February of 2018, and since then, the prices cannot recover.
Although the year has been negative taking a look at the prices, investors believe that a new bull run could soon start again. The expectations are related to many different things including the approval of the first Bitcoin ETF and financial institutions entering the market.
One of the first things that we can mention is related to regulations. Virtual currencies are highly unregulated in most of the countries around the world. This might be a reason why Bitcoin is still operating in such a bearish way. However, this is starting to change. As soon as the bear market was starting, some countries such as Malta started to create regulatory frameworks that allow the technology and cryptocurrencies to grow.
With more regulations in the space, institutions and more traditional investors could be tempted to enter the virtual currency market. Regulations will provide a better space for companies to diversify their portfolios.
The second thing that could create a new bull run or help the cryptocurrency market grow again is the approval of a Bitcoin ETF. This Bitcoin ETF would allow investors from the traditional stock market to start investing in the virtual currency space.
The U.S. Securities and Exchange Commission (SEC) has to take a decision about it during the next months and until February 2019. There are some companies such as VanEck and SolidX presenting their ETF proposals. It is important to remember that after the first Gold ETF was approved, the price of the precious metal started to grow the following months and reached new highs.
Although the aforementioned things would play a very important role in the virtual currency market, developers would have to invest time and resources in order to allow the network to face all the technical challenges that it faces. One of the most important things that Bitcoin needs to face is the scalability problem. At the moment, the network is able to handle just a few transactions per second.
Since Bitcoin’s popularity grew over the past few years, the number of users transacting funds has also increased. The Bitcoin blockchain was not able to handle the growing amount of users sending and receiving funds. Fees to process transaction increased and transaction times have also grown.
This is why there are some developers that are working in order to create a new second layer solution for Bitcoin and its scaling issues. Users will be able to transact funds – including small sums of satoshis – and the network would not be congested. The transactions would later be broadcasted to the network.
This would help Bitcoin to scale, allowing users to process millions of transactions per second at almost no cost.
Finally, mass adoption could also help Bitcoin to reach new price levels in the coming months or years. Some retailers are already starting to accept Bitcoin and cryptocurrency payments. And this is clearly something very positive for the whole crypto ecosystem.
At the time of writing, Bitcoin is the largest crypto in the market in terms of market capitalization ($110 billion dollars). Each BTC can be purchased for almost $6,400 dollars.
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