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Could 2019 be the Year of Bitcoin’s Comeback?

Could 2019 be the Year of Bitcoin’s Comeback?

2018 proved to be a nightmare for Bitcoin investors everywhere. There was an 80% drop in the price of BTC, which led to a downward spiral for the entire cryptocurrency market. The result was a loss of US$700 billion in the total market capitalisation.

Despite such a poor run in 2018, many pundits of the cryptocurrency industry believe that 2019 could prove to be a good year for Bitcoin. They support the view that Bitcoin is the most reliable digital asset and will see a major recovery in its market cap by the end of the year.

What Do Reports and Analysts Say?

US global management consulting firm, AT Kearney, in its Year Ahead Predictions 2019, predicted the rise of Bitcoin, among other future events. According to the report, “By the end of 2019, Bitcoin will reclaim nearly two-thirds of the crypto-market capitalization, as altcoins lose their lustre because of growing risk aversion among cryptocurrency investors. More broadly, financial regulators will soften their stance towards the sector.”

The manager of thought leadership at AT Kearney’s Global Business Policy Council has explained another reason for the rise of BTC, the complexity of altcoins. He was quoted by Forbes as saying, “Our prediction that Bitcoin will regain its dominance is supported by the ever-growing complexity among altcoins, most recently demonstrated by the ‘hash war’ that occurred in the Bitcoin Cash ecosystem. Additional ‘hard forks’ and the continued lack of consensus among developers about a path forward will further widen the chasm between Bitcoin as the most accessible and widely recognized cryptocurrency and the altcoin community.”

Fundstrat Global Advisors strategist, Tom Lee, has predicted positive trends for BTC due to favourable macroeconomic trends. On CNBC’s TV show, Futures Now, he said, “The real story is the fundamental one, that Bitcoin’s becoming quite useful… We’ve seen the launch of digital currencies by not only JP Morgan and Mizuho Bank, but also Facebook and some social media companies gearing up. And, of course, in places like Venezuela, where Bitcoin’s become very large and widely used, turmoil is causing adoption growth. So, I think these are really setting up for a strong year.”

He added, “I think 2019’s a year about repair. We have a risk-on rally in global markets that’s positive for Bitcoin; it was a headwind last year. And the dollar isn’t surging like it was last year. That’s a headwind that’s gone away.”

Factors that Support Bitcoin’s Comeback in 2019

A lot of things have been said about Bitcoin’s slowdown in 2018. Despite the bearish market sentiment and all the negativity around it, there are signs that Bitcoin could make a strong comeback by the end of 2019. Here are some factors that could form a foundation for the comeback of the most popular digital currency in the world.

1.    The Power of Lightning Network

For those who are new to cryptos, Lightning Network is a protocol that was designed to solve the problem of scalability in Bitcoin transactions. Originally, it was aimed at helping the Bitcoin blockchain remove some of its technical limitations. However, since its inception, it has evolved to become deployable on top of any blockchain.

By the end of 2017, Lightning Network (LN) was mainly on testnet. In 2018, this completely changed as it entered the Bitcoin mainnet, allowing developers from all over the globe to test the new technology.

Between April 2018 and August 2018, the Bitcoin Lightning Network grew 15% each month. The number of channels increased from 4,000 to 11,000, while nodes doubled from 1,500 to 3,000.

As of April 2019, it has more than 5,100 nodes running its software on live systems, which is a 17% increase from the previous month. The capacity of the mainnet network is 548.35 BTC, equivalent to more than US$2 million.

LN has paved the way for more scalable Bitcoin transactions and has proven to be a major step in bringing smart contracts into the existing Bitcoin Network. It enables instant transactions as well as micro transactions, which has made Bitcoin suitable for daily as well as retail use.

Apart from all these advantages, Lightning Network will take out miners from the entire transaction and also decrease the transaction fees.

2.    Increase in Academic and Public Interest

2018 saw a surge in academic interest related to Bitcoin, with a significant increase in the number of scholarly articles on Google. While there were just 83 articles in 2009, the number jumped to nearly 4,000 in 2014, 10,600 in 2017 and around 15,000 Bitcoin-related scholarly articles in 2018.

The figures show that there has been a notable increase in academic interest in Bitcoin as a subject. This is important for the growth and development of the asset class, as academic research can lead to key technological innovations.

It may not bring back the popularity of Bitcoin to its original levels, but it will still help to increase the knowledge base over a period of time. In this way, the problems that are inhibiting Bitcoin’s growth can be singled out and solved.

A study of Google searches for 2018 has shown that people are still interested in BTC, despite the slowdown. An article on CCN revealed that “What is Bitcoin?” is one of the top questions that Americans are asking. And, according to statistics by Google Trends, people in countries such as Ghana, South Africa, Nigeria and the Netherlands have become highly interested in Bitcoin since 2018.

The rise in popularity of Bitcoin can also be seen from the fact that it has become a trending topic on the top search engine in the world. The analysis of various market experts and positive signs given by various technological advancements show that there is a good chance of the revival of Bitcoin’s fortunes in 2019.

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