What's Next For Cryptocurrencies?

Bitcoin peaked in value in December 2017 near the $20,000 level and has since lost more than half its value. What's next for bitcoin and other major cryptocurrencies? Two professionals attempted to answer the pressing question in TV appearances this week. 

Coinbase's Bauerle Sees Healthy Shift In Bitcoin Price

Bitcoin's surge in value, with a peak in December 2017, could be attributed to "speculation going long on the asset," Nolan Bauerle, CoinDesk's director of research, said during CNBC's "Squawk Box" segment Thursday. The subsequent move lower represents a "healthy change," as the supportive infrastructure network for bitcoin and other cryptocurrencies has not yet been built, he said. 

The infrastructure to support cryptocurrencies will be built from the "failures" of companies like Facebook, Inc. FB 2.31% who are "peddling in all of information," Bauerle said. Rather than viewing bitcoin as a commodity, it should be seen as a "reserve currency for an alternative financial system," he said. 

Price Targets, Regulation And Investment Giants

Several bitcoin bulls remain optimistic the cryptocurrency can soar in the months ahead, CNBC's Seema Mody said. 

Fundstrat Global Advisers' Tom Lee has a $25,000 price target for bitcoin. At the same time, many financial and investment experts disagree with Lee's model, which implies a 300-percent surge. 

Bitcoin investors should expect more federal regulation action, as the digital currency is often used by criminals, Mody said.

The Securities and Exchange Commission's new cryptocurrency czar Valerie Szczepanik could introduce new guidelines and rules related to initial coin offerings. This could be seen as a reaction to more than $9 billion raised in ICOs since the start of 2018, compared to $5.4 billion raised throughout all of 2017.

If the SEC clearly communicates new rules on cryptocurrencies, investors may expect Wall Street heavyweight investment firms to "enter the crypto world," Mody said. Asset managers like Fidelity could become bitcoin custodians, which would add liquidity to the bitcoin market — and perhaps more importantly, add a new layer of credibility, according to CNBC.