The development of cryptocurrencies ushered in a new class of digital assets enabling investors to store and transfer value with minimal fees and overhead costs. Based on the growth of the cryptocurrency market between 2017 to early 2018, CoinRecon Group expects 2018 to be turbulent as the market decides winners and losers amongst the competing cryptocurrencies and ICOs. Exchange services will also be challenged as many will fail to meet new or evolving regulatory requirements and some will not remain reputable after cyberattacks.
Comparison to the Stock Market
When determining the viability and long-term growth of the cryptocurrency market, consider the relative size of the cryptocurrency market compared to the stock market. Consider that over $60 trillion is invested across the main 60 global stock exchanges, of that amount, $15 trillion is traded or invested at the New York Stock Exchange (NYSE); this is according to the World Federation of Exchanges (WFE). On January 7th, 2018, the cryptocurrency market peaked at $825 billion in Market which approximately (1.3%) of that 60 trillion invested in the top 60 exchanges and approximately five percent of the NYSE.
In early February 2018, the cryptocurrency market dropped to approximately $280 billion, (approximately one tenth of a percent of the NYSE, and a fourth of a percent of the main 60 global exchanges). The cryptocurrency market recovered to $420 Billion around the middle part of February 2018. As mainstream adoption of cryptocurrency continues, CoinRecon Group expects the market to continue to grow throughout 2018, with very high volatility.
What to look for in 2018
Near-term: Expect the increases in the cryptocurrency market capitalization after 22 February 2018 following the Chinese New Year holiday. Asian-based buyers and sellers, especially in China, South Korea, and Japan, continue to drive much of the cryptocurrency market. Follow the market capacity of a coin in relation to its share of the total cryptocurrency market capacity because this shows the trend of a given coin to keep a price that is in proportion to other coins, or fall behind the other coins. This might determine value as when the entire market rises, each of the top coins should rise in value in proportion.
Long-Term: Total market capitalization will return to a previous high of $825 billion. A return to the previous market high is an indicator of recovery. CoinRecon Group assesses the market high will be reached around July to August 2018. Assessment is based on the expectation of institutional investors to enter the market due to low coin prices and due to the recent loss of purchasing power in the U.S. dollar.