Bitcoin Predicted to Regain Dominance in Cryptocurrency Market

Bitcoin has been mired in months-long downturns, and that trend has continued into 2019, with its value dipping to almost $3,400 (₹241,400).

But Bitcoin owners can take solace in A.T. Kearney’s prediction for Bitcoin moving forward. The renowned global management consulting firm predicts that Bitcoin — the so-called “people’s currency” — will regain its market dominance by the end of 2019. Specifically, it will reclaim nearly two-thirds of the crypto-market capitalisation on account of altcoins losing their appeal. The latter, according to A.T. Kearney, will happen primarily because of “growing risk aversion among cryptocurrency investors” and the “growing complexity of altcoins.”

Curiously, the proliferation of altcoins has partly contributed to Bitcoin’s price dip. While many of them seem untenable, a fact that will pave the way for Bitcoin becoming the undisputed cryptocurrency in the world, there are other factors involved. Chief among them is the possible softening of digital currency-related regulations, which could lead to the launch of Bitcoin Exchange Traded Funds. A development such as this is a big deal, as it will allow broader investor participation, thus boosting Bitcoin and the entire world of digital currencies.

A pause in interest hikes can also help facilitate a Bitcoin renaissance next year. Bitcoin, it should be pointed, was rolled out at a time when interest rates were low. Ergo, rising interest rates adversely affect Bitcoin’s prices, and that is exactly what happened this year. But with fewer interest hikes projected for 2019, there is a very real possibility that Bitcoin will rebound in a big way late this year and into next year, along with the prospect of it regaining the lion’s share of the market.

There are also other factors at play to be bullish about Bitcoin, as pointed out here in the ‘5 Reasons Why Cryptocurrency Will Flourish in 2019’ article posted last December. The fact that Bitcoin and its underlying technologies are now “past experimentation stage” is one such factor, which means that mistakes made by developers in the past aren’t likely to be committed again in the future. “Pretenders” will also be filtered out, meaning only useful, game-changing currencies will be left in the blockchain ecosystem. Plus, the increasing awareness of blockchain will mean a spike in worldwide adoption, making digital currencies more appealing to more people.

Should Bitcoin, indeed, rebound in a big way at the end of this year, an interesting dynamic might be in play: Bitcoin mining might — whether deliberately or inadvertently — pick up. That will accelerate the road towards the 21 million cap, which is the maximum number of Bitcoins that can be mined, at least according to existing rules. With FXCM reporting that approximately 82% of Bitcoin have been mined  (roughly 17.3 million units) as of September 2018, that means Bitcoin mining is perilously close to being capped out, with less than 4 million units left to be mined. For the sake of perspective, however, the 82% were mined in a 10-year span, from 2008 to 2018. Right now, no one knows just yet what will happen if the 21 million cap is reached, although speculation is rife that it would “place upward pressure on the price” as Bitcoin will be perceived as being scarcer.

All that being said, 2019 figures to be an important year, as it may shape the long-term future of digital currencies and blockchain. So far, though, that predicted bounce back has not happened just yet, as Bitcoin prices are yet to surge at all so far. On the contrary they have seen a steep, downward trend. It’s a long year, however, which means there are 11 more months for Bitcoin to rebound in a big way.