Today, there are various patterns and trends that are visible in the crypto market. While it’s difficult to predict the future, here are our top 5 big crypto predictions over the next one to two years. These insights are based on our personal observations and are not financial advice.
Key facts:
– Bitcoin might surpass the $100,000 benchmark.
– “Cryptocurrency” will evolve to “digital assets.”
– Ethereum will maintain its stronghold.
– DeFi platforms will undergo compliance transformations.
– The market will continue to experience cycles, including potential downturns.
1. Bitcoin’s Potential Rise Despite Political Pressure
While many assume that the success of cryptocurrencies is a foregone conclusion given their previous performance cycles, we should be wary. Notably, with figures like Joe Biden and his administration showing resistance to the crypto world, the future is uncertain. Despite this, the prediction is that Bitcoin will surge past the $100,000 mark within the next couple of years, potentially yielding a 300% gain. This return rate dwarfs what one might expect from traditional investments, like the S&P 500.
2. Evolving Terminology: From Crypto to Digital Assets
The terms “crypto” and “cryptocurrency” have acquired negative connotations over time, often associated with speculative or illicit activities. As a result, we believe we’ll witness a shift in terminology. Instead of “cryptocurrency,” we’ll be talking about “digital assets” or “blockchain technology”. This change will likely be more palatable for institutional investors and align better with global regulations.
3. Ethereum’s Continued Dominance
Ethereum is the second-biggest crypto that’s shown unique resilience. Unlike Bitcoin, which remains unparalleled in its niche, Ethereum faces competition from emerging “Ethereum killers” nearly every week. Despite this, we predict Ethereum will stand strong in the upcoming cycle, bolstered by its first-mover advantage, extensive developer community, and growing network.
4. The Compliance Era for Decentralized Finance (DeFi)
With a background in traditional financial services, I’ve seen the aftermath of the 2008 financial crisis up close. Post-crisis, banking norms were tightened with measures like AML (Anti-Money Laundering) and KYC (Know Your Customer). However, the rise of DeFi platforms has reintroduced unregulated lending and borrowing. Our forecast is that regulators will soon intervene, imposing traditional finance-like requirements on DeFi platforms. While this could lead to initial turbulence, we believe that compliant DeFi will emerge stronger and more attractive to institutional funds.
5. Human Nature and Market Cycles
When bull markets roar, euphoria sets in. Everyone starts believing in the invincibility of their investments. This time, many might argue, will be different because of the influx of institutional money and the possibility of a “super cycle.” However, our final prediction contradicts this. Market cycles driven by human emotions of fear and greed will continue. Even with new dynamics at play, we should brace for another potential crash.