2018 Crystal ball throws up familiar themes_ bitcoin, brexit, and corporate consolidation what is bitcoin xt

What will be the key themes for 2018? A look in the proactive crystal ball throws up bitcoin, brexit, sterling, and corporate consolidation – once again.

Bitcoin bubble to burst?

2017 will forever be remembered as the ‘year of bitcoin’. Okay that may be a slight over exaggeration, but cryptocurrency and blockchain have definitely been two of the year’s biggest buzz words.

Bitcoin, probably the best known digital currency, has seen its value soar to a peak of over US$20,000 this year, although a year-end drop took it back nearer to US$13,000, while other cryptocurrencies such as ethereum and litecoin have also enjoyed huge rises in value.

But a lot of market commentators have warned about the future of cryptocurrencies.

Earlier in december the wolf of wall street himself, jordan belfort, called digital currencies a “huge scam”.What is bitcoin xt

Speaking to CNN, belfort said: “you will see [bitcoin] skyrocket, there will be a short squeeze, it will go even higher and then eventually it will come caving in – it’s almost a guarantee.”

He’s not the only one predicting the cryptocurrency’s demise either. The financial conduct authority’s head andrew bailey recently told the BBC that investors should be prepared to “lose all their money”.

But people have been predicting cryptocurrencies’ downfall for months now and they’re yet to be proven right, so 2018 will be interesting – will the tech geeks or the city spivs get it right?

Brexit progress to reignite sterling?

Sticking with currencies, the pound has been in focus ever since the 2016 brexit vote and that will likely continue into 2018.

The fall in the value of the pound has helped to push inflation up to above 3% making everyday life more expensive for britons, while it has also meant that our money doesn’t go as far when we travel abroad.What is bitcoin xt

Sterling did perk up towards the end of the year though as progress was made in talks between the UK government and the european union on the divorce details.

How those discussions move forward next year will again be the main driver for whether or not the pound can creep back towards where it was on 23 june 2016 – the day before the brexit referendum.

There seems to be a growing sense among political commentators that a ‘hard’ brexit is now unlikely and any positive breakthrough in the divorce talks should see sterling rally.

Don’t forget that another UK interest rate rise in 2018 isn’t out of the question either and that could serve as a further boon for the pound.

That said, however, not everyone is bullish. Lloyds bank reckons the pound-euro exchange rate could fall further, perhaps almost to parity, in 2018.What is bitcoin xt

Quantitative strategist gajan mahadevan recently said both brexit talks sides face “challenges…in coming to a comprehensive agreement” and he is forecasting an exchange rate of €1.09 next year, some 3.5% lower than where it currently is.

Foreign buyers to re-emerge?

Should that be the case, it would make sense for UK companies to be targeted by foreign firms looking to expand on the cheap.

The pound has been relatively low for a while though and that theory hasn’t really rung true. While luxury handbags and extravagant clothes have been flying off the shelves of UK stores this year, the same can’t be said for british companies.

Indeed, two of the biggest takeovers this year actually fell through – deutsche börse and the london stock exchange, and unilever and kraft-heinz. Another one, sky and fox is still waiting on regulatory approval more than a year after the offer was made.What is bitcoin xt

There are a few reasons why foreign takeovers have been limited: the government tightened the takeover code amid concerns that UK firms were particularly vulnerable to foreign poachers, while the US has cracked down on tax inversion – buying a company to take advantage of the lower tax rates.

Consolidation expected instead

As a result, what’s more likely to happen next year is UK businesses merging with other UK businesses.

Given the toxic combination of stagnant wage growth and above-target inflation, it’s becoming increasingly difficult for retailers to get their customers to part with more of their money.

One way to get around that is to grow revenues and profits through acquisitions – just look at tesco and booker or sainsbury’s and argos, and there could be more of that next year.

The gambling industry has also had to consolidate in recent years to overcome intense competition – quick factoid: there are 33 betting shops in and around grimsby – and regulatory changes.What is bitcoin xt

Paddy power and betfair merged back in 2016, while ladbrokes coral and GVC have finally struck a deal having been sniffing around one another for most of the year.

With analysts predicting the big bookies could lose as much as £150mln in annual revenues from the latest changes to regulations and as it is becoming harder to find a high street not saturated with several gambling shops, more mergers could be on the cards in 2018.

On a more european front, city number crunchers expect some consolidation in the airline sector, especially given that the price war ravaging the industry claimed the lives of monarch, alitalia and airberlin in 2017.

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