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Expert insight: What’s next for Cryptocurrency?

It’s Bitcoin’s birthday! Image: Getty

Wednesday marked 10 years since Satoshi Nakamoto released the revolutionary whitepaper: Bitcoin: A Peer-to-Peer Electronic Cash System, which triggered a tidal wave of innovation and launched a rollercoaster cryptocurrency.

A decade on, the question on everyone’s lips is: “Where to from here?”

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Yahoo Finance asked five Australian crypto-experts their thoughts.

“More interest in technology, less on raising capital”
Derek Henningsen – Huobi Australia

“The crypto markets are currently well into bear territory, however somewhat ironically that is an overall positive for the broader blockchain ecosystem as it is allowing projects to focus on building out their technologies and worry less about fundraising,” Henningsen told Yahoo Finance.

He noted that 2018 has seen an increased focus on the way we use blockchain technology and less on raising capital.

But there’s also been an increasing movement from initial coin offerings (ICOs) to security token offerings (STOs) as investors want to possess more equity-like products.

“STOs are subject – for the most part – to a more stringent regulatory regime here in Australia, meaning increased time to market for projects but with stronger protections for investors. We see this type of increased regulatory oversight as a positive for the crypto and blockchain space.”

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He said Huobi, as an exchange, doesn’t predict future token prices. Nevertheless, he noted the “clear increased interest” from institutional players like Fidelity.

“As the big players continue to move into the space, this increasingly will add legitimacy and credibility, as these large players conduct extensive due diligence before proceeding. We expect this will only help further raise the bar in terms of security and standards in the space.”

Huobi Australia is a cryptocurrency exchange backed by the world’s third-largest digital currency exchange, Huobi Global.

“Bitcoin to hit USD$50,000 by 2020”
Sophia Williams – Crypto Connect

Williams predicts the move from a bear to a bull market will trigger an “exponential” increase in the price of Bitcoin and other cryptocurrencies. She said increased uptake by businesses will also see further cryptocurrency use.

“In terms of the future price of Bitcoin, it is difficult to pen an exact value as this is a very different market than any we have ever seen,” she continued.

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“But due to the supply of only 21 million Bitcoin and the demand increasing in the future, I would expect Bitcoin to hit USD$50,000 by 2020. This is when the Bitcoin halving takes place.”

Crypto Connect is a cryptocurrency education, training and technical services provider.

“Prices will go up”
Skye Dunworth – Spendher

Dunworth said there are a few key drivers behind the cryptocurrency market’s growth.

The first is poverty. She explained that in some countries like Brazil and Venezuela, it is extremely difficult to use cash given the hyperinflation cycle driven by political forces.

“Citizens are adopting Bitcoin out of necessity and to avoid poverty.”

Then there’s increased accessibility as more and more big businesses allow crypto-payments. “As an individual, being able to transact and transfer internationally, virtually for free and instantly, with 100 per cent visibility of your transaction is a logical choice for many.”

These factors, coupled with technology enhancements and greater institutional investment will see prices go up.

“Historically there have been bull runs following Bitcoin halving which occurs every four years. When this happens, the difficulty in mining a Bitcoin becomes twice as difficult, and the supply will decrease,” Dunworth said.

“I believe we will see another bull run after the 2020 halving, and exchanges are working towards solutions to keep the capital in the market after this happens. We saw a 75 per cent drop this year, and the problem we are trying to solve is keeping investment in the market.

“Long term, I wouldn’t be surprised to see Bitcoin at $1 million per coin as we get close to all Bitcoins mined. Within the next five years $250k would not surprise me.”

Spendher is a cryptocurrency app designed to make spending, storing and selling Bitcoin and ethereum easy. It also has a focus on money education.

“It will expand by at least 5,000 per cent in the next 10 years”
Adrian Przelozny – Independent Reserve

“We firmly believe that the decline of the cryptocurrency market is behind us and there will be an uptrend soon. One sign of this is the fact that there has been a prolonged period of price stability,” Przelozny said.

“The heightened regulatory oversight is also a positive for the market. The pace of mass adoption will inevitably increase and we can reasonably assume there is potential for the cryptocurrency market cap to reach at least 2000 per cent above its current valuation.

“The market has changed so much in the last 10 years, it will be unrecognisable when it reaches its 20th anniversary.”

He noted industry expectations that the cryptocurrency market will expand by at least 5,000 per cent in the next 10 years to $20 trillion from the current $400 billion.

Independent Reserve is one of Australia’s first cryptocurrency exchanges. Its mission is to transform cryptocurrency technology into regulated, robust and secure financial services.

“New growth cycle”
Jonathon Miller – Bit Trade

Miller said Bitcoin and other cryptocurrencies saw significant growth in demand in 2017 thanks to a “wave of projects” entering the market.

“These projects are now faced with the challenge of maturing from germination in a competitive market – funded by an inrush of capital and a significant boom and subsequent depreciation the market now exhibits some healthy scepticism.

“One thing remains consistent – there is a steady stream of institutional entrants into the industry who seek to make use of this technology on a scale greater than previously seen, which is a positive sign for the blockchain technology projects and associated cryptocurrencies.”

He said the “consistent march” of regulation will provide institutional investors a framework for considering a new asset class: tokenised securities. Sometimes known as smart securities, these present a “significant opportunity to traditional marketplaces”.

Continuing, he said they could even bring in a new growth cycle.

Bit Trade is Australia’s longest running cryptocurrency exchange platform and is also a founding member of the Australian Digital Currency Association.

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