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The bottom has been reached 

Dec 26, 2018

At the beginning of last week, the cryptocurrency market has grown significantly. BTC growth exceeded 35%, while Bitcoin Cash (BCH) went up by more than 220%. It is worth noting that the prices of all cryptocurrencies from the TOP-20 significantly increased as well as the market capitalization. The number of optimists has significantly increased.

Joseph Lubinе, the co-founder of Ethereum said that the “bottom” of the cryptocurrency market has already been reached. He points to the panic that provoked such a powerful price decline in 2018. Henry Arslanian, FinTech & Crypto Leader at PwC, also expects positive trends in 2019.

Joseph Lubinе also predicts positive trends, focusing on the development of blockchain technologies, their active implementation by businesses and at the state level. Henry Arslanian drew attention to the increasing interest in the market among institutional investors. According to him, the regulation of the cryptocurrency sector is already yielding the results. That’s why the further development of regulation will help to enhance the attractiveness for institutional investors.

Development of the legal framework and the entire infrastructure, in general, is the key condition for creating Bitcoin-ETF. This scenario enhances the possibility that the “bottom of the market” has already been reached and now the trend will be upward. However, it is still extremely difficult to predict how fast large investors will get involved in this market.

Development of the legal framework and the entire infrastructure, in general, is the key condition for creating Bitcoin-ETF. This scenario enhances the possibility that the “bottom of the market” has already been reached and now the trend will be upward. However, it is still extremely difficult to predict how fast large investors will get involved in this market.

The slump of the stock market and the oil market contributes to the increase in demand for cryptocurrencies; in short, it is a migration of capital. Arslanian identifies three groups of investors: the first group will launch their own companies, the second group will collaborate with already existing cryptocurrency and blockchain companies, and the third group will invest in this industry (institutional investors).

There always were optimists, especially at the moment of the rapid growth of the market. Therefore, we should not blindly trust their predictions and expectations. It is impossible to ignore the fact of the rapid development of technology and the market in general. However, the bearish market over the biggest part of 2018 also should be considered.

There also could appear another powerful driver which can impact the price. For example, in 2017 and the first half of 2018, ICOs serve as the driver for the market. They are no longer popular and now the absolute majority of investors have a negative attitude towards this method of fundraising. It is hard to say whether Bitcoin-ETF will appear in the nearest future or whether a new way of investing will become popular. But if there are no new tools for attracting institutional investors, further growth cannot be expected.

Spencer Bogart, Blockchain Capital partner and the Wall Street analyst has a less positive point of view. He expects the minimums of the current year to be updated, marking a potential target of $1000 per BTC. But at the same time, he anticipates the growth of BTC and the market in 2019. Mike McGlone, an analyst of Bloomberg Intelligence believes that despite oversold of the market, in 2019 we may see new minimums. It is noteworthy that he does not specify anything about potential growth.

Analyzing the statements mentioned above, we can spot that there is no common point of view. There are indeed many fundamental factors for the revival of the market. One of these fundamental factors is the possibility of creating a stock exchange investment fund (ETF) for cryptocurrencies.

Therefore, the risk of further price decline for TOP-10 cryptocurrencies remains elevated.

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