At the time of writing, we are experiencing a sell-off. The markets are down all over and memories of last year’s bull market rally seem far away. But all markets go up and down. What will trigger the next bull market? Here are some of the events you should pay attention to:
Amazon Accepts Major Cryptocurrencies
If the world’s leading e-commerce company starts to accept cryptocurrencies that will have a major impact. A big “cryptocurrency guru” are speculating, and have been speculating for a while, that this will happen very soon.
It is a fact that the company has registered a range of cryptocurrency domains. This obviously drives speculation. Another scenario would be if Amazon launched its own cryptocurrency. This would clearly speed-up customer adoption of crypto.
The SEC Allows Cryptocurrency ETFs
In the United States regulators has been perfectly clear that cryptocurrencies are legal. But there’s a lack of institutional investors in the asset class and there is more than one reason to this. The actual buying process of cryptocurrencies is not easy. There are many exchanges out there and most of them are outside of the US.
One thing that would give cryptocurrencies a whole new level of legitimacy is cryptocurrency ETFs. These would bring in the retail investor money. Up to this date the SEC has said no. But they are not really “against” cryptocurrencies and sooner or later they will give their approval.
The Lightning Network
The Visa network can handle more than 3,600 transactions every second. This can be viewed as the benchmark that cryptocurrencies must beat in order to have any real use as money.
Today, things are slow. Bitcoin does 3 BTC per second. Newer generations of cryptos are faster, with Dash being a prime example. Thanks to a system of authentication relying on trusted master nodes, transactions are pre-approved and marked as valid before the actual coins come through, similar to how non crypto electronic payments work. But as effective as Dash is, it’s simply not used widely enough. Bitcoin, still the most popular currency, needs a speed boost to raise interest in crypto as a whole.
The Lightning Network has the potential to do this, but we don’t know how long it will take before the system is up and running. And it must run smoothly enough to gain peoples trust.
RSK – Smart Contracts
With RSK technology Bitcoin would be able to compete with Ethereum on smart contracts. This is more of an opportunity for Bitcoin and a clear threat to Ethereum, but competition based on technological advances should lead to a stronger marketplace.
A Country Adopts a Cryptocurrency, or Invents Their Own
This might seem a bit unrealistic at first, but sooner or later it will happen. A total systemic collapse of a country including all of its financial institutions will force people to adapt in order to survive. Which country will be first? Greece? Venezuela? Time will tell.
Short-term market reactions to all kind of events are difficult to predict. But the long-term reactions can only lead one way, to new all-time highs. With a long-term investment perspective, it is possible to prosper in this market.