In an extensive paper dedicated to the future of cryptocurrencies, Juniper Research Ltd. present a bleak view of the market over the coming months and years. The financial analysis group states that the entire Bitcoin and digital asset space appears to be heading towards an “implosion”.
Juniper’s Report Analyses Cryptos Over the Next Five Years
During the paper titled “The Future of Cryptocurrency: Bitcoin & Altcoin Trends & Challenges 2018-2023“, financial research group Juniper Research Ltd. analyse various areas of interest surrounding the emerging asset class. These include the performance and evolution of the digital currency space over the last year, possible reasons for dwindling prices, and the future of Bitcoin with regards retail payments.
The group also looks at important technical, regulatory, and social issues facing Bitcoin and other digital coins. There are sections dedicated to the factors behind cryptocurrency volatility (regulation, exchange security compromise, contentious hard forks, etc.), and provide an analysis of the 14 biggest exchange platforms and the services they offer.
The conclusions Juniper draw seem consistent with those of many mainstream economists and financial institutions. Based on their overview of the space, they suggest that the market could be heading for even bleaker times than those experienced in 2018 already:
“In short, given our concerns around both the innate valuation of Bitcoin, and of the operating practices of many exchanges, we feel that the industry is on the brink of an implosion.”
Additional reasons they cite for such a damning forecast include: shrinking transaction volumes over the course of 2018, as well as a sharp decline in the value of transactions.
In terms of volume, the figures Juniper use to illustrate the drop are 360,000 daily transactions in late 2017 versus 230,000 in September of this year. Meanwhile, figures that are used to highlight the reduction in transaction values show an even greater decline. Over the same period, the difference between the former figure and the latter is over $3 billion.
Finally in their analysis, the group point to a worsening geopolitical landscape in the wake of Brexit difficulties and a breaking down of U.S.-Chinese trade relations. For them, these factors should have provided the ideal backdrop for a pronounced move of capital from traditional currencies to cryptocurrency. The fact that the market did not respond in such a way is another sign of weakness for Juniper.
However, many of the metrics given can also be used to back an entirely different theory – that those remaining in the market are using Bitcoin as a store of value, rather than a tool for blind speculation or a medium of exchange.
Since Bitcoin represents the most immutable blockchain-backed currency and, by extension, the soundest money ever known to humanity, the lack of transaction volume, coupled with the levelling of price drops, could be indicative of an army of “true believers” in the technology holding the asset for a proverbial “rainy day”.
Given that currencies operating with weak monetary policies have historically been replaced by harder forms of money, the current bear market likely represents nothing, but a hiccup along the path to a freer financial future to the converted.