Bitcoin (BTC) is the most important cryptocurrency. Most government-backed money that goes in and out of crypto goes through bitcoin, so what happens to the original cryptocurrency affects the entire market.

The token's market dominance stood at about 40 percent as of Wednesday. By my estimates, however, it's clear bitcoin's market dominance should return to 75 percent of the entire space.

I actually see a 150 percent potential upside in bitcoin for 2018.

Why? Well, BTC is still dominant. It has the biggest user base and the biggest industry. Still, it faces a challenge in scaling up for wider use.

Bitcoin now can't handle more than six or seven (or, with the "Segregated Witness" protocol upgrade, it's 12 to 14) transactions a second. Compare that with credit cards, which involve thousands of transactions per second, so the criticism about bitcoin's ability to be useful at larger scales is understandable.

The scalability challenge results in high fees as well.

What is the solution? It is the so-called second-layer peer-to-peer off-chain networks. To cite an example, look at the Lightning Network. Created by Blockstream, the Lightning Network allows for transactions off the blockchain, thereby decreasing the transaction costs almost to zero and increasing the speed and scalability almost infinitely. And it's just getting started. As you can see from this map, more and more nodes as well as channels are being established. It is growing exponentially.

In the coming months, we will see a sharp uptick in transactions and the use of more bitcoin in these channels. What's more, the Lightning Network doesn't have any fee.

In other words, second-layer networks solve the problems bitcoin faces — scalability and lack of liquidity. That could be a key reason why bitcoin surges this year.

At the end of 2017, I foresaw that bitcoin would drop as low as $5,000 — but it could potentially climb to as high as $60,000. Lightning Network will have a big impact on the potential upside.

There are also other second-layer projects like Rootstock that would allow computations similar to those of ethereum (a blockchain-based computing platform that supports another cryptocurrency named ether) to be done through bitcoin.

Exciting projects such as those could cause a significant spike in BTC. I would dare say in the realm of 60 to 70 percent with the potential upside of 100 percent — and maybe even more.