The cryptocurrency industry has advanced a long way since Bitcoin was introduced in 2008. In the past decade, cryptocurrency has broken barriers in finance, economics, eCommerce, and monetary policy. It is predicted that the global cryptocurrency market volume will reach $1,758 million by 2027. As it becomes more and more prevalent in our lives, we have to ask how valuable cryptocurrency will be in the future?
We can’t predict the crypto industry’s future without looking at the cryptocurrency market’s current state. Here are the trends we observe today:
- Bitcoin and Ethereum are leading the way in the cryptocurrency market, acting as its biggest influencers.
- Blockchain technology is getting involved in more and more areas of the crypto market.
- Investors are interested in crypto projects looking to create platforms for launching decentralized applications (dApps).
- We have seen significant growth in decentralized finance (DeFi).
Now that we’ve looked at what the market is currently, let’s make some predictions for its future:
Analysts like BlackRock’s chief investment officer, Rick Rieder, seem to agree that Bitcoin isn’t going anywhere. The consensus seems to be that BitCoin will remain the gold standard of the crypto world. This is mainly due to the willingness of Millenials to embrace cryptocurrencies and digital payments. Furthermore, it is a strong mechanism for trade.
Stablecoins, such as Silver Coin, are an asset-backed cryptocurrency. This means they are backed by a stable asset, minimizing the volatility of cryptocurrency. They will be a valuable investment for the future because investors can rely on the asset’s value if the stablecoin value falls. Additionally, investors can make fractional purchases of the asset. This means you don’t have to purchase the physical asset and store it.
- Decentralized Exchanges
Just as decentralization benefits consumers and merchants, so too can it help traders. With decentralized exchanges, transactions can be done peer-to-peer. There will be no need for a trusted intermediary, and therefore there will be no transaction fees. Furthermore, decentralized exchanges don’t have a single point of failure as with centralized exchanges; consequently, they are better secured against hackers.
Even though cryptocurrency has high volatility, it is ideally suited to take on credit. This is because many traders and investors benefit from receiving funds immediately in cryptocurrency. Furthermore, crypto loans offer low-interest rates, and a simplified system of requirements for borrowers would allow those who hadn’t been approved for bank loans to receive digital funds.
It is clear that the future will require more regulation in the crypto industry. Currently, cryptocurrency is a legal means of payment in some places, and in others, it is not. In the future, this will change as cryptocurrencies are rapidly integrating into the global financial system. This will require more countries to legalize cryptocurrency as traditional financial institutions won’t be able to have a monopoly over the management of financial flows.
As the participants of the G20 summit concluded, a complete prohibition of cryptocurrency will not solve anything as the digital currency is playing a significant role in the economy. Therefore, if they can’t ban it, it must be regulated.
The world is changing quickly. If our predictions are correct, very soon, the traditional financial institutions will no longer hold a monopoly on financial flow management. In the future, we can expect to see traditional finance being disrupted by blockchain and cryptocurrencies. We will use cryptocurrency for our eCommerce transactions, with BitCoin and Stablecoin becoming as frequently used as Mastercard and Visa. This decentralization of transactions will extend to trading, as well. Furthermore, we will start seeing loans in cryptocurrency. Finally, due to the rise of cryptocurrency in our everyday lives, we will see our governments regulate this form of payment.