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Bitcoin, Altcoin Take Hit in Transactions, Exchanges Raise Hope for Future

Mobile Commerce Insider Featured Article

February 04, 2015

Bitcoin, Altcoin Take Hit in Transactions, Exchanges Raise Hope for Future

By Steve Anderson
Contributing TMCnet Writer

When it comes to Bitcoin, while there are still places that take the cryptocurrency, there's less of it overall going on these days. A new report from Juniper Research (News - Alert) says however, that the industry is looking to regulated exchanges to help keep Bitcoin and its bunch in the thick of things.

The report from Juniper Research titled, “The Future of Cryptocurrency: Bitcoin and Altcoin Impact & Opportunities 2015 – 2019,” illustrated the issue rather well. While in 2014, the value of all cryptocurrency transactions was said to be just over $71 billion total, the expected value for 2015 is set to be just over $30 billion, or better than a 50 percent loss. That's a big hit to most anyone invested in cryptocurrency, but the question is, just what's behind that hit? The report notes several factors, including the multiple exchange collapses like those of Mt. Gox, outright theft, and even concerns about regulators' responses to the cryptocurrency, particularly as connected with so-called “dark web” purchases. Additionally, the report notes something of a spike driving that $71 billion thanks to sudden surges in Auroracoin, Dogecoin, and Litecoin, surges that didn't last the year. Indeed, by the end of the year, the daily dollar value transactions on these had dropped to just five percent of the established peak.

That's disaster-grade news for the various cryptocurrencies, but Juniper Research does see one potential light at the end of the tunnel: regulated exchanges. With the introduction of said exchanges, there's a possibility that the values could stabilize, and with stabilized values, so too might well come increases in transactions as users would have a much more definite idea of how much Bitcoin and the like was worth at any given time.

But even with improved opportunities, some suggest there will still be an uphill battle for Bitcoin and its ilk beyond the most technologically-savvy of consumers. For instance, report author Dr. Windsor Holden offered up some comment on Bitcoin's potential future, saying “It is likely that we will see the technologies behind cryptocurrency deployed in areas such as real-time transactional settlement. Ripple Labs is already focusing overwhelming on that approach and in the medium term we may see a role evolution to this end amongst other cryptocurrency players.”

Given that most Bitcoin users these days are, as the report suggests, the tech-savvy and / or libertarian, it's worth suggesting that Bitcoin may never really break out of that particular mold. Indeed, the growth of mobile payment systems that work on a dollar basis and connect easily and securely to debit and credit cards or bank accounts outright may reduce Bitcoin and the like to niche players. With over half of Americans habitually using mobile banking tools, it's proving comparatively much simpler just to use normal dollars through an online payment platform.

Only time will tell just what the cryptocurrency market will look like, and what kind of impact regulated exchanges might actually have, but there's still value to be had there. For how much longer, however, remains the key question.

Edited by Stefania Viscusi

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