Interest in digital and cryptocurrencies is surging as the massive price jumps in Bitcoin fuel visions of huge profits.
Looking to 2018, Bitcoin is predicted by some analysts to continue to increase in value, with Ronnie Moas, founder of Standpoint Research, recently upping his 2018 target price for Bitcoin to $28,000 from $20,000. Dave Chapman, managing director at Octagon Strategy, adds that the price of Bitcoin could be $100,000 “before the end of 2018.”
But there are over 1,000 currencies from which to choose, according to experts in the field. Some of these are also experiencing major price increases. Clearly, there is interest in identifying the next big currency, or, having a portfolio of different promising currencies.
The cryptocurrency market capitalization surpassed $500 billion this week, with Bitcoin hitting $17,000, up more than 50%, from $11,000 at the beginning of last week. Another currency, Ethereum, took off on Monday and was heading toward $800 after bouncing around the $400 range for a few weeks.
“I think Bitcoin will probably stay at the top of the mountain, but there’s no guarantee,” Moas said. “I like to be diversified.”
“As people are using cryptocurrencies for more and more applications, Bit alone is not sufficient,” Vipul Goyal, a professor at Carnegie Mellon University, added. “Sometimes, you need features which Bitcoin just does not support. Sometimes, you need security properties which Bitcoin designers didn’t have in mind. Thus, an ecosystem where different cryptocurrencies co-exist is the most likely future scenario.”
Also, Goyal says Bitcoin prices are currently “somewhat inflated,” and he says it is smart to invest “in various initial coin offerings and new cryptocurrencies.”
Among the alternatives, Allison Berke, executive director of the Stanford Cyber Initiative, said, “Ethereum is the largest cryptocurrency after Bitcoin, and is designed as a platform for executing smart contracts, so it has functionalities in its software, the Ethereum Virtual Machine, that Bitcoin lacks, including the ability to reference other contracts on the Ethereum blockchain, delay contract execution until an external trigger, and include multi-signature verification.”
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When it comes to having a diverse portfolio, “Ethereum is a must,” Goyal adds.
“Ethereum is built on superior technology compared to Bitcoin – although Bitcoin has the advantage of coming to the market earlier,” he explained. “Ethereum supports a programming language which is far more advanced and allows for so-called ‘smart contracts’: a feature which is becoming increasingly popular.”