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What will happen to cryptocurrencies in 2018?

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Probably, even the tribes inhabiting the remotest areas have heard about bitcoin this year. This global frenzy has led to the drastic rise of bitcoin rate and other digital currencies as well. Supply and demand, as they say. The headlines about new record rates and the total value of all cryptocurrencies in the world appear almost every day, so do the concerns about possible collapse.

Julian Hosp, the chief of TenX, a company that helps people deal with the digital currencies, predicts further rapid rise and fall of bitcoin. “It might hit $60,000 and might drop to $5,000”, he says, but no one knows whether it is going to rise or fall first. Numerous influential financial consultants and even governments warn about the same hazard. Virtual currencies have “no backup”, their value isn’t underpinned by anything, unlike traditional hard currencies.

The year 2017 has proved the volatility of the digital assets: bitcoin has multiplied its value in several times during the year and hit the unexpected almost $20,000 mark before it declined by almost 50% to $11,000 in December. This Tuesday the virtual coin was traded at $15,185. Some traders seized the opportunity to buy more bitcoin while the others became more alert.

Fluctuation is a common feature of many assets, but bitcoin might experience next sharp rise and fall already next year. Hosp compares virtual currencies to the dotcom bubble in the late 90s. While the cryptocurrencies are unlikely to burst, they might consolidate and become of little value in the near future. He has doubt that digital money will operate on a daily basis. He added: “winter is coming, eventually”.

It is worth mentioning, that Morgan Stanley has also issued a warning: according to the consultants, only 3 out of 500 major online retailers recognize cryptocurrencies as a mean of payment. If other players will be reluctant to acknowledge virtual currencies in the near future, they will end up with zero value.

Sources: Business Insider, CNBC

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