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Back in 2016, Barry Silbert—founder and CEO of Digital Currency Group (DCG)—shared his prognosis regarding bitcoin and blockchain for the year of 2017. Now that it is almost over, it's already possible to identify which of those predictions came true and which did not.
Bitcoin will become "digital gold," and traditional investors will start adding it to their portfolios.
This forecast turned out to be partly correct. In 2017, crypto investors were acquiring digital assets more often. The list of those investors includes notable entrepreneurs, hedge fund investors, and brokers. Among them are Steve Wozniak, Mike Novogratz, Bill Miller, and Mike Maloney. The problem is, regulated trading platforms (exchanges and over-the-counter (OTC) markets) don't provide enough bitcoin-related financial instruments yet.
ETFs will bridge the gap between cryptocurrency and legacy finance.
In this year, The Securities and Exchange Commission (SEC) rejected a few bitcoin-based exchange-traded funds (ETFs) proposals. The agency said that the country was incapable of preventing fraud and manipulation in bitcoin operations and protecting investors' and public interest. Nevertheless, Chicago Mercantile Exchange (CME) will launch bitcoin futures contracts in December this year. Apparently, this could result in regulator changing the attitude towards bitcoin ETFs.
Cross-border payments/remittances using bitcoin will hit $1 billion run rate.
Although it's impossible to check this figure yet, it's clear that bitcoin is not a leader in cross-border payments. As the block size issue remains unsolved, the low transaction throughput—that is 4.3 transactions per second—persists. The supreme leader in this field is Ripple allowing for an instant transfer of funds no matter the location and currency. It can process as many as 70,000 transactions in 3.7 seconds. Besides, the company is partnering a few world's leading banks.
India, Japan, and the Middle East will experience an exponential bitcoin transaction growth.
At first, India seemed to have accepted bitcoin as a legal payment method, but in the summer, its Ministry of Finance recommended that the cryptocurrency be banned. Domestic analysts think that this is what precisely is going to happen. In contrast, Japan officially started considering bitcoin legal tender. The Arab countries, however, hesitate to give bitcoin a massive adoption, and UAE Central Bank warned the citizens against the use of cryptocurrencies as a medium of exchange.
There will be an explosion of blockchain POCs focusing on supply chain and global trade.
One of the most notable cases here is Walmart. It started testing the blockchain system to track a product's progress from farm to store shelf.
Identity solution competition will heat up, but no leader will emerge.
The bitcoin anonymity was proven to be nothing more than a myth long ago. In August, The Daily Beast published documents confirming that The Internal Revenue Service (IRS) had purchased software for bitcoin users identification. Not all digital currencies encountered such issue in 2017, though. For instance, Ethereum preserves anonymity by having integrated zk-SNARKs, which means that zero-knowledge proofs enable parties to verify if a statement is correct without receiving anything more than a true-or-false statement.
SEC will come down hard on ICOs.
Fortunately, the only steps the commission took were tightening the requirements for conducting an ICO and defining tokens as securities.
There will be more M&A transactions.
That's barely possible at present, experts say. The economics, individual sovereignty, and lack of drag along rights on both sides prevent any meaningful and cleanly executable acquisitions.
Micropayment models will materialize.
Unfortunately, bitcoin is still primarily used for large-scale transactions, and physical currencies remain a way more convenient means of making micropayments.
Bitcoin price will be "higher."
The price indeed increased dramatically compared to the previous year. In December 2016, 1 BTC could be purchased for $700. Despite the recent fall, now it seems to be stabilizing at around $6,500 levels. On November 8, BTC price reached an all-time high of $7,882.