Expert Forecast: What Awaits the Cryptocurrency Market by Year End?

Analyst Sean Williams from Motley Fool has compiled the top 5 forecasts for the cryptocurrency market in the second half of 2018. highlights the expert's key thoughts on the matter. 

Cryptocurrency Market Capitalization to Decline

Sean Williams suggests that by the end of the year, the overall cryptocurrency market capitalization will decrease.

The notable surge in the crypto market during 2017 was primarily driven by individual traders benefiting from the rise in cryptocurrency value. 

However, the entry of institutional investors in early 2018, allowing for futures trading on CME and Cboe, has provided opportunities for traders to profit from cryptocurrency declines. 

According to Williams, this trend inevitably leads to a decrease in cryptocurrency values, with the peak expected by the year-end. Unfortunately, the forecast is not optimistic; the cumulative market capitalization during this time is not expected to reach the «golden standard» of $830 billion.

Bitcoin to Drop by Half

Sean Williams claims to have been among the first to predict Bitcoin's fall, even when it was trading at $14,000. Since then, the value of the coin has more than halved, recently standing at $6,000 and gradually rising to $8,000. However, the expert is confident that the coin will continue to fall, expecting it to drop by another half by the end of the year. 

Potential reasons include the impending centralization of digital currency, pressure from leading countries, the influence of institutional investors, and the slow transaction processing speed of the Bitcoin network.

Another Coin to Lead

Bitcoin might lose its leadership position this year. According to Williams, Ethereum (ETH/USD) is likely to emerge as the leader in financial transactions, possibly around the New Year. While the coin may not maintain high quotes for an extended period, it could stir excitement on trading platforms.  
The current market capitalization figures stand at $130 billion for Bitcoin and $58 billion for ETH, creating a difference of $72 billion.

It's entirely plausible that Ethereum might catch up and surpass Bitcoin, driven by factors such as the 500 members of the Ethereum Alliance and the network's utility.

The USA will take control of cryptocurrencies.

This is the most obvious forecast from Sean Williams. In May, the Department of Justice, the Securities and Exchange Commission, and the North American Securities Administrators Association carefully examined the cryptocurrency market. They identified and punished fraudsters engaged in scams with digital coins in Initial Coin Offerings (ICOs).

There are also reasons to believe that the Tax Administration will close the loophole in the income reporting section currently accessible to trading platforms. Bank accounts of traders on exchanges may come under control. Regulatory bodies may introduce mandatory account verification, following the example of South Korea.

The Emergence of Bitcoin ETF

Will a exchange-traded fund (ETF) on the market appear? This question was raised sharply by Bitcoin futures from Cboe. So far, the Securities and Exchange Commission has prohibited the creation of this instrument. However, Williams is confident that an ETF will emerge.