Although cryptocurrencies have been around for many years, I think it is fair to say that 2017 was the year that they came to the fore.
Arguably the highlight was the incredible rise of the bitcoin price. The number one cryptocurrency finished the year with a staggering return of 1,300%.
To put that into context, if you had bought $10,000 worth of bitcoin at the start of the year, it would now be worth $130,000.
Will the rise continue in 2018?
While I am bullish on cryptocurrencies in the long-term, I'm not entirely convinced that bitcoin is the future. In fact, the technology is really quite cumbersome and has become antiquated already.
It takes 10 minutes to process a transaction with bitcoin, which simply is not acceptable in today's day and age. Unless this changes in the near future, I think competing (and technologically superior) cryptocurrencies such as ripple and bitcoin cash could supersede it.
One leading finance figure believes that bitcoin could tumble as low as US$5,000 this year, compared to the US$13,759 it is fetching today.
In an interview with CNBC, Dennis Gartman joined others in comparing the bitcoin craze to the tulip mania that swept through the Netherlands 400 years ago.
He stated is belief that: "When bitcoin falls, and it shall, it'll trade under US$5,000. Whether it does it next week, next year, six months from now, it'll happen."
But it is worth pointing out that not everyone is bearish on bitcoin. According to the Wall Street Journal, one unidentified trader has bet US$1 million that the bitcoin price will be higher than US$50,000 on December 28 of this year.
Time will tell whether it is Gartman or the trader which is right.
