Looking into the future is a skill a few financial investors have and it is something that can help them make money and avoid losses.
Of course, we don’t mean that these people have some extra sense or special power; rather, they just know how to do their research and draw the right conclusions from the tea leaves.
Predicting future movements in the value of cryptocurrency is done in a similar, although in many regards a more complex, way. That is analysts use available information to try and predict price movements for a given cryptocurrency.
Since it isn’t a company or a fiat currency, the information people rely upon include everything from the coin’s underlying technology, the hype surrounding it, and even its swings in value.
If you’re picking up on the idea that predicting the price of a cryptocurrency is really difficult, then you’ve been paying attention.
Nonetheless, we will try to help you hone in on one particular coin today: Siacoin.
We will try to give your some insight into what kinds of movements we see Siacoin making over the next few months and we will also try to offer you some recommendations about what you should do.
Naturally, it is up to you as to whether or not you invest in the cryptocurrency but we think we’ve gathered a good amount of information to help you make that decision.
First, to understand Siacoin and how it works differently from other crypto coins, we will have to give you some background information.
Siacoin Price Prediction : Background information
Siacoin is a decentralized system for storing encrypted information on unused hardware. If that sounds different from Bitcoin and the rest, that is because it is. Some people have called Siacoin the “Airbnb” of cryptocurrency because it lets you rent out space in the cloud. This is being positioned as an alternative to cloud-computing services from tech giants like Google, Amazon, and Microsoft. The number of people that participate and use Siacoin as a storage medium will drive up the price of the coin.
Siacoin Price Prediction : How does it work
Basically, Siacoin establishes a contract between the person providing the space and the person renting out the space. The ledger, or blockchain, keeps track of every important transaction and contract detail. It makes sure the person renting out the space is paid for the term while the person who rented it is given encrypted access to their information. The emphasis on decentralization is part of Siacoin’s goal of creating a network of computers that offers a more robust level of cloud computing than the big boys can do.
A lot of the future of Siacoin’s price - and its success as a platform - depends on how many developers Siacoin can get invested in the service and how it builds it out from there.
Siacoin Price Prediction : Predicting the Future of Siacoin’s Price
One thing that is difficult to do is to predict the future trajectory of Siacoin’s price.
This is compounded by two things: Price volatility and the unique nature of the Siacoin cryptocurrency.
Siacoin’s price has fluctuated wildly, rising to a high of $.25 to a low of $.023 - basically, it’s not for the faint of heart. As the 41st largest cryptocurrency on the market, Siacoin has a market capitalization of $235 million. It isn’t the most stable and lucrative market for investors and falls firmly into the speculative territory. Then again, many crypto investments fall into that area. People who are able to tolerate vast fluctuations in value will probably find Siacoin a wild ride but possibly one that is profitable.
Many analysts, for what it is worth, think that Siacoin will hit a valuation of $1 in the near future. That would be a pretty large gain from the low of 3 cents a coin but perhaps not much for someone who bought it when it cost nearly a quarter. Still, such a predicted rise is worth noting.
But more important is how, exactly, do analysts see Siacoin rising in price that much?
There are four major reasons that underpin this somewhat optimistic view of Siacoin’s future.
The first, and probably most obvious, is that the Siacoin technology represents a credible threat to the centralized cloud data services that currently dominate the market. If Siacoin is able to capture even a small fraction of that market then its value will go up. Siacoin has even attracted the attention of techno-enthusiast and billionaire John McAfee who found the SiaCoin technology intriguing.
The real roadblock to this growth is getting big name players to sign on to the technology. Whether that will happen or not remains to be seen and this are alone is fraught with issues, chief among them security and stability. While excellent in concept, the Siacoin proposition is rather untested when compared to traditional cloud services. But, if it begins to represent a real cost savings for companies, we could see an upward trajectory for Siacoin.
The second issue really impinges upon the first. Because Siacoin is the medium of exchange for the network, its value is wholly dependent on the size of that network. Its growth, or lack thereof, will have a marked impact on Siacoin’s value. Investing in Siacoin is thus more like investing in a technology startup and a cryptocurrency at the same time. There are more considerations than mere trading going on here but also an actual service that has to be monitored.
The third factor that will hugely impact the success (herein defined as a price rise) of Siacoin will be its convertibility with other cryptocurrencies as well as how many exchanges it gets listed on. This is really a no brainer. Having Siacoin available for purchase on more and more exchanges means that many more potential people have the ability to participate in the Siacoin market. The more people who are able to buy the greater the potential that some of them will buy Siacoin. As this occurs, the price will go up as a simple function of supply and demand. Again, this goes back to the dual issue facing Siacoin’s price: It is both a cryptocurrency and it underpins a service. Siacoin not only has to convince people to use its technology but also to buy its currency.
Convertibility the second aspect of this third factor. Having Siacoin listed on a bunch of cryptocurrency exchanges is all well and good, but if it is not easily converted into other cryptocurrencies, then its value will be hampered. Convertibility refers to the process of transferring Ethereum into Bitcoin and vice versa as well as converting the cryptocurrency itself back into fiat currencies. As Siacoin grows this will likely grow as well but it isn’t a guarantee. Convertibility is one of the strongest indicators of healthy market demand and it is part of the overall ecosystem that cryptocurrencies occupy. Having convertibility with a market leader like Bitcoin, for example, would do a lot to bolster confidence in Siacoin’s future price.
And that leads us to the fourth and final concern for investors when it comes to Siacoin: Price stability. Because it is relatively new on the market, we don’t have a lot of data in this area but what we do have is wild and tough to interpret from a futures standpoint. This is because, with such limited data, the only predictions that could possibly be made are that it becomes worthless or it goes up infinitely - neither of which are useful for investors. We mentioned the bullish assessment earlier that Siacoin could hit $1 and we think this is a fair target for someone just getting in on the market. This isn’t the hugest leap in value out there but it does represent a solid gain for those investors who are satisfied with that kind of transaction. This also could scare off the more speculative traders that tend to really cause market volatility as potential gains of 25% to 75% don’t always attract that crowd. But, then again, attracting a crowd is part of Siacoin’s mission.
Siacoin Price Prediction: The conclusion
Where does this leave the average investor? It is tough to say but, one thing is certain, the future of Siacoin’s price is uncertain. The underlying technology that Siacoin uses is definitely solid and worth a look, but it also could fail to catch on in the market which would be a devastating outcome for Siacoin’s price. Getting itself listed on more exchanges can help with the speculative nature of things, but having people actually adopt its technology is what will determine whether or not Siacoin has a future as a big cryptocurrency medium.
In its favor, Siacoin has a pretty large market capitalization already for a cryptocurrency that isn’t as widely traded as many of its competitors. Also, the confidence that many in the tech world are expressing in Siacoin’s technology bodes well for its future. It remains to be seen what the concept can do with this confidence and whether or not it will work out in the market.