Researcher Expects Surging Cryptocurrency Transactions To Exceed $1 Trillion in 2017

Driven by higher prices and more usage, the value of cryptocurrency transactions could exceed $1 trillion this year, more than 15 times their level in 2016, a British research firm estimates.

Hampshire, England-based Juniper Research in a new report pegs the value of cryptocurrency transactions in 2017’s first half at $325 billion. Typical daily trading volumes are now exceeding $2 billion, Juniper said.

Much of 2017’s rise is being driven by a “dramatic increase” in the price of digital currency Ethereum, Juniper said. Launched in 2015, Ethereum accounted for two-thirds of the value of digital currency transactions in the first six months of this year, Juniper reported. A unit of Ethereum traded for a mere $8.19 on Jan. 1, but now is priced at about $300, according to CoinDesk.com.

Litecoin, another alternative currency, also is experiencing a surge in volume and valuations, Juniper said. “If current levels are maintained [Litecoin] should exceed $100 billion in transactions this year,” the research firm said.

Bitcoin, the original blockchain-based cryptocurrency, has seen its price rise from about $1,000 at the start of the year to approximately $4,300 today. Just over a month ago, a so-called hard fork in Bitcoin’s underlying code created a spin-off currency dubbed Bitcoin Cash, which in just a few days moved into the No. 4 slot among the cryptocurrencies by valuation. Bitcoin Cash’s infrastructure has greater processing capacity than the mother currency.

Another proposal to increase Bitcoin’s transaction capacity, dubbed SegWit2x, is expected to go live in November. But the controversial plan “may prompt a split in the [Bitcoin] community, potentially leading to depreciation,” Juniper said.

The new report also discusses the future of blockchain technology, the underlying system for most of the new currencies. Blockchain is an electronic ledger in which transactions can be confirmed publicly by any interested party, but new, private blockchain technologies called permissioned ledgers, in which only authorized users can validate transactions, represent “the brightest prospects in the sector,” Juniper said.