2018 In Crypto - 11 Predictions

Authored by The Element Group via Hackernoon,

Cryptocurrency market observers will remember 2017 as the year of the ICO boom, bitcoin’s hard fork(s), cryptokitties, a few major hacks, and the time when every single dinner party swayed towards talking about the price of bitcoin at some point or another. Instead of looking at what just passed, today we’re looking at the year that awaits us.



As we reflect on the past year, we see a number possible trends that will affect the market in 2018.

Here are our predictions for the year to come:

1. A major exchange will be hacked

The exchange space is evolving rapidly — with many new entrants post-China shut down repainting the space. The emergence and quick dominance of Binance, the reboot of many former mainland platforms, as well as proliferation of exchanges in Japan and in Korea Appearance of many smaller/regional players with other raw tech will lead to more exchanges being compromised, and more used funds at risk. Some are building from scratch. Some are buying off the shelf. Strong security/tech/blockchain talent is impossible to find. Many will come under attack, and there a good chance one major exchange will fall due to lax operational standards and risk management infrastructure.

2. Coinbase’s extreme influence will continue

In the US, there are really only three retail on-ramps into crypto. Coinbase, Gemini, and Kraken. Because the space has grown so quickly and the State-By-State MTL moat is so wide, it will take significant time for other players to emerge and get plugged into the US banking infrastructure. This has been exacerbated by the effective departure of Bitfinex from the US market. There’s hope that Bittrex will get to fiat, but no other good solutions are in sight. What we see forming in the US is an organic natural monopoly, where a decentralized garden is supposed to flourish. Even the dream of decentralized exchanges presupposes that these “moneycenter” exchanged exist.

It’s going to be an interesting year for exchanges.

3. Futures on other cryptocurrencies, more options structures, and ETFs will emerge

Futures were easy…. Because they are cash settled instrument that are fundamentally divorced form the underlying BTC liquidity. With the scramble to get bitcoin futures up and running that we saw towards the end of 2017, it is a given that more and more such products will emerge. We previously commented on why bitcoin futures are essential. First and foremost, they represent a movement to cater towards more traditional investors, and we are confident that we will see many more products catering towards a more sophisticated trading audience in 2018.

ETFs are hard because they have to won the coin. They take a leap of imagination from regulators. They take an orderly market with manageable volatility. The high absolute BTC price might do the trick. Here’s to them taking a leap in 2018.

4. There will be a major correction in the ALTS

Easy come easy go. Lots of people sitting on massive paper gains for shallow and illiquid coins. Many of those coins trade on small exchanges, with limited capacities. When a big dip comes and sellers don’t see buyers, are unable to sell in size, and look for any exit opportunities, we will see a massive rerating of the alts space. While there’s talk of relative value in Tier 1 coins, few will step in when the sector truly goes red. It take a certain type of chutzpah to buy something that’s down 85%. Nerves of steel. Stay calm and carry on.

5. Crowd sales and orderly markets will be the regulatory focus

While the Munchee decision drew several bright lines, it left many questions unanswered. The Chairman’s statement, a new method of regulation, is being digested by the leading law firms and the path forward remains unclear. The enforcement posture is changing. The Crypto Bar is expecting more clarity and more engagement in Q1. While it has been quiet on the cryptocurrency trading side, one or more regulator will put a stake in the ground. Market manipulation, in all its forms — pump and dump attempts, insider trading, front running and other ways of impeding an orderly market. Crypto is the first truly global market — it will be interesting what regulator coalitions emerge to address it.

6. Institutional service providers will build for the space

The lack of traditional service providers (order management systems, reconciliation software, custodians, etc.) has kept many institutions and fiduciaries out of cryptocurrencies. The emergence of sound technical solutions in this category will mean a considerable operational risk gap will be filled, leveling the playing field for many fund managers. Many of the service providers that have emerged in 2017 will have built up a sufficient track record to prove attractive for institutional players.

7. Fund managers will experience a dispersion of returns.

In the past year, it was not uncommon for a fund manager that bought and held to promote their extraordinary returns as alpha. It is, of course, apparent that these returns had more to do with market dynamics rather than individual skills. This trend will change in the next year as markets continue to mature and gain efficiency. The skill and edge of a fund manager will become more evident as good managers will show higher returns than lucky managers.

8. We will see bouts of hyper-volatility because of futures expirations, options expirations, and ETF rebalancing.

As these new financial products become more popular, their effect on market trends will be more pronounced. Even traditional equity markets experience high levels of volatility a few times a year because of these scheduled events. This type of volatility will be an order of magnitude larger in the cryptocurrency world when futures and other derivatives expire or need to be rebalanced.

9. We will see at least one traditional financial brokerage firm lose money and go out of business because of mismanagement with a derivatives product.

Despite there being a listed derivative with futures (and possibly ETFs), the truth of the matter is that trading and hedging with the underlying asset is still an operationally tricky test. One bad trade or one bad line of code within a company that isn’t a cryptocurrency trading expert can and will do irrevocable harm to the bottom line.

10. Sentiment, Momentum and Insider posture — psychology owns this market.

There’s been quite of a bit of mob mentality driving the marketplace as the retail trader can feel empowered making public market calls on social media. That platform to voice an opinion coupled with some good luck has made the average investor feel invincible, so much that they do not listen to what insiders are saying or doing. As evidenced by the correction that happened in December, paying attention to insiders matters. More than likely they know more than the average person, no matter the numbers the latter may have.

11. A bank run?

At some point, lots of people will try to take real fiat dollars off exchanges.. and see the massive weak link. Getting dollars out of an exchange entirely depends on their banking providers continuing to play along. Most exchanges have a 100K / month withdrawal limit for their high verification tiers… hard to “go to cash” and “fly to safety” — and Tether won’t help. What if there’s a pause… the way Bitfinex paused this year, but recovered. What if all those gains in crypto, on exchange, in cold wallets, all of it… starts having a hard time getting to USD?

It’s a young, global, stormy, 24/7 capital market. 2018 will be its year.


Skateboarder Raffie Sat, 01/06/2018 - 17:26 Permalink

It's not time to cash out yet. That will be around 2020.

2018 is the year of alts. Look out for crazy moves in what become the top 20 in 2018, 19, and 20. They will largely tend to be value-based, with technology underneath that actually makes progress in the decentralization push.

Look out for Substratum, Chain Link, Burst, ETH Lend, and Crowd Machine (yet to release).

They are going to make a difference and gain huge market caps.

In reply to by Raffie

Luc X. Ifer Brazen Heist Sat, 01/06/2018 - 18:03 Permalink

I wouldn't be surprised.  Also the year when Ethereum will lose interest and start becoming irrelevant.  Finally, Ethereum team announces the scalability problems due to bad initial design/architecture are behind their capacity to address and solve and they are asking for contributors help to improve the platform - not going to happen, there are already available alternatives which started using more mature approach to initial design and evolving architecture meant to proactively address scalability and performance increasing needs. https://www.computerworld.com/article/3245928/emerging-technology/ether…

In reply to by Brazen Heist

Brazen Heist Raffie Sat, 01/06/2018 - 19:36 Permalink

You need to never take your eyes off fundamentals. That guy is predicting price action solely on technical indicators. There is a limit to technical analysis. I'm also bullish on LTC, I see great utility in its network, low fees, flexible and changeable coin in general. Today some whales made some big buys, probably have inside knowledge. They will take a dump eventually, but its a sign that LTC will make big gains this year, however, I doubt the $6-8K range. It depends on fundamentals quite alot, and the LN network is a big one this year. LTC grows in tandem with BTC.

In reply to by Raffie

Raffie Brazen Heist Sat, 01/06/2018 - 20:10 Permalink

His projections then you adddin what Charlie Lee is doing and there you go.

Charlie Lee next LTC SF will greatly lower LTC transaction fees. In the end Charlie want to ZERO out transaction fees. This is big to people and stores and store owners. 

There is a lot going on in Litecoin and it is not slowing down. BTC is very expensive to do a transaction and slow as hell.

Look over DBT https://www.digibyte.co/

In reply to by Brazen Heist

zorba THE GREEK Raffie Sat, 01/06/2018 - 23:44 Permalink

Zorba doesn't usually tell his friends what to do with their money, but 5 weeks ago Zorba told most of his friends that Ripple, an unknown crypto, was going to make a big move because it was only 24 cents and was a perfect vehicle for dishonest banksters to run up and Ponzi unsuspecting smucks. Zorba was right and in 5 weeks it was up 1200%. Only one of Zorbas friends went through the tedious and painstaking process to actually buy it. He was rewarded for his efforts with a 10 fold profit. The rest of Zorbas friends complained about how hard it was to get approved to buy Ripple. No pain, no gain. 

In reply to by Raffie

fbazzrea johngaltfla Sat, 01/06/2018 - 19:15 Permalink


"For a disclosure requirement to be triggered, BOTH of the following conditions have to be met:

  1. The transaction is (or related transactions are) larger than $10,000 in size, AND
  2. Payment is made using actual cash (i.e. Federal Reserve notes and U.S. coins) or with two or more cash instruments (defined as money orders, cashier's checks, or traveler's checks) which, individually, are $10,000 or less but when totaled together equal more than $10,000. Personal checks, debits, bank wires, and credit card payments are NOT considered cash or cash instruments, and, therefore, purchases using them do not trigger disclosure by a dealer regardless of their amount(s)."--https://www.moneymetals.com/news/2015/03/02/the-ins-and-outs-of-governm…

it's not so much anyone would be trying to avoid taxes, if in fact, payment with BTC would be considered "cash" instead of falling under the category of "...debits, bank wires...", but that there is an entire financial ecosystem developing sans USD. THAT is the point... with the rise of cryptos, we won't NEED USDs for anything, except possibly to pay taxes, but i'm fairly confident the USG will develop their own crypto which will be publicly exchanged at either fixed or floating rates with the rest of the cryptosphere.

think about it... if the American taxpayers owe $trillions, it will be easy to pay the national debt when the markets determine 1 BTC = 1M USD or more. cryptos are the way out of our dilemma. instead of fighting the flow of progress, more should embrace this historic monetary revolution and position early. just sayin... i'm in.

In reply to by johngaltfla

Skateboarder Bill of Rights Sat, 01/06/2018 - 17:33 Permalink

Even silverbugs like I had to get in on the crypto. I kinda got screwed with getting in during Christmas time with the LTC bear run and missed the boat on the huge ramp by the time Coinbase had the coins in the wallet, but think I will be okay in the long run.

Still, this year I'm gonna get in on some more of the perma-$17 Ag firesale. Maples are nice looking little things.

In reply to by Bill of Rights

Agstacker Sat, 01/06/2018 - 16:36 Permalink

I've traded on Binance and was curious about other exchanges, what was the message when I tried to create an account?


'We're sorry, due to the massive number of new account creations we can not accept any more'


Lots of $ is waiting to pour into cryptos, BTW if you want to trade but can't create an account I've been happy with shapeshift, no account needed.

fbazzrea j0nx Sun, 01/07/2018 - 00:46 Permalink

of course, i have a Coinbase to convert USD/BTC or ETH/BCH/LTC, but then send to wallets in Bittrex to exchange for other coins/tokens. 

i store 90% in their respective wallets either downloaded or online, whichever the case may be, but leave some at Bittrex to do a little trading... build up then deposit a little more in their wallets. it's hard to mess it up the way this market cap is exploding.

i'm diversified in a dozen or so which is nice with all the volatility. despite the larger uptrend, serious downswings occur but diversification softens the downside. it's not hard to visit their websites, Reddit, blogs, GitHub accounts and figure out which ones are living up to their white sheet's vision and roadmap. experienced traders will have fun... i guarantee.

oh yeah... read some having troubles with Kraken but i signed up last night to trade a few companies unavailable on Bittrex. it did take a few times with verification on the signup key but persistence paid off.

In reply to by j0nx

Agstacker fbazzrea Sun, 01/07/2018 - 07:55 Permalink

This is the same way I do it, buy one of the big 3 on coinbase with USD, then transfer to my wallets.  Move them from there to exchange for whatever alt coin I want, lots of wallets to keep track of but I don't like the idea of storing them all in one.


Read up on the coin you want to buy, see what activity it has on github and reddit like you said. 

In reply to by fbazzrea

freak of nature Brazen Heist Sun, 01/07/2018 - 01:51 Permalink

Bitgrails entire volume was running on a single node which is why they had issues to begin with. It's not listed everywhere as the exchanges need to do actual work rather than just list another erc20 token or btc fork and expect it to work out of the box.

Raiwallet is solid. You need to try it to see what all the buzz is about with Raiblocks. Once you have, you'll wonder if Bitcoin really will last much longer. Provided it doesn't have serious architectural flaws.

Made 30x plus on Rai in 3 weeks. As ridiculous as that was, even more ridiculous is that there's still room to move once proper wallets get released. Apparently first iOS wallet is expected end of the month.

Edit for readability.

In reply to by Brazen Heist