Where are cryptocurrencies headed in rest 2017

The tremendous gains of cryptocurrencies during the first half of this year have created a lot of speculations in the market regarding the road ahead through the end of 2017.

A quick recap of what happened and what could be the possible outcome by the end of the year is what I intend to explain here.

Since the start of the year Bitcoin has seen its all time high at $3000 + and then resisting back 28% to $2478, this is double the price since Jan 2017. This significant rise was a result of a sudden increase in demand in the Asian countries, Japan was the major contributor by giving a legal status to bitcoin and major retailers started accepting bitcoin as payment.

At the current situation bitcoin is facing a lot trouble because of the increasing rift between the developers and businesses over the question to increase its trading capacity and increasing the transaction speed due to the constant growth in volumes. As a result of this bitcoin could possibly split in separate competing coins as a result of a hard or soft fork.

Due to this discussions the market sentiment moved towards finding different trading alternatives and Ethereum came a long way to be the 2nd ranked currency by market cap and price. The chart below shows how bitcoin conflict gave rise to the spike in Ethereum price.

Ethereum which was trading at $15 in the beginning of March 2017 suddenly spiked up to reach an all time high of $419 followed by a sharp crash to $260 in June 2017.

Though there is a difference between these two coins technically; however, the major difference has to do with the purpose of the two coins.
Bitcoin was created as an alternative to fiat money; it's a purely digital currency. Ethereum developers on the other hand, set their sites on forging a platform that facilitates peer-to-peer contract, or as some refer to it, "smart contracts." The simplified explanation: Ethereum transactions of any sort would level the playing field for buyers and sellers by enabling payment to be released concurrently with fulfilment of transaction conditions.
Even both bitcoin and Ethereum compete as cryptocurrencies, they aren't in fact meant to be direct competitors.

ICOs To Drive Expansion

An ICO is a cross between crowdfunding and an initial public offering that sells digital tokens, or “coins,” created through blockchain technology in exchange for cryptocurrencies of immediate value.

ICO's have created a greater potential to drive the prices of bitcoin and ethereum positively to attain new highs because of the nature of an ICO to raise funds in BTC or ETH primarily. This increases the demand and the price moves upward.

Ethereum’s development was initially funded by an ICO. With speculator appetite for blockchain rapidly expanding, the price of Bitcoin and Ethereum is likely to continue to rise as funds are being raised in those currencies.

Rise beyond BTC and ETH

Litecoin and Ripple were number 2 and 3 respectively as per ranking on coinmarketcap before ETH rose in the 2nd quarter of 2017.

Ripple has rapidly surpassed Litecoin in market cap, making it rise the rank chart.
Ripple and Litecoin have different purposes. Ripple is a payment protocol, a secure way to represent and transfer any unit of value. It is used by banks, such as UBS and Santander, and can't be mined.

Litecoin is technically more advanced than bitcoin because transactions can be processed more quickly, reducing the types of bottlenecks often seen with Bitcoin trades. In case of hard fork on bitcoin network Litecoin has a deep potential to surpass bitcoin price soon.
On day trades cryptocurrencies are and will continue to be controlled by traders, still the high volatility and flash crashes are there to stay for a longer time.

Number of Cryptocurrencies listed by coinmarketcap

This is an interesting aspect. Just look at graph.

As of today there are more than 800 different coins which are listed. The top 150-200 are performing exponentially creating more potential and avenues for traders which overall increases the market cap of cryptos which is a positive sign.

Over the past few months, many of these currencies appreciated exponentially. SelfieCoin, for instance, was worth $0.000002 in early June; it's now trading for 0.000026. That may seem like two ridiculous numbers, but it represents a gain of 1300% in under a month. PonziCoin (a name that hints at bubble status in and of itself) went from $0.0014 in March to $0.087 at its high for the year so far, on June 6. That's a 6250% gain, or 62.5 times its earlier value.

ETF and Mutual Fund Adaption

With such potentially lucrative profits in play, it's no surprise that fund management groups and companies are also looking to enter the virtual currency domain.
GBTC doing OTC funds and listing of USDBTC pair on exchanges shows the adaption and creates demand.
Last month, Zug, Switzerland-based Crypto Fund AG, announced that they plan on launching the Cryptocurrency Fund, a European mutual fund based on the Cryptocurrency Index, which will invest in the most prominent virtual currencies including Bitcoin, Ether, Ripple and other well-established cryptocurrencies. The fund is scheduled to launch sometime in Q4 2017.

To conclude, cryptocurrencies will still keep on moving upwards in a highly positive volatile momentum.

Thanks.

Shrirang