What is the future of cryptocurrency?
The whole story began in 2009 when Bitcoin was introduced. Nobody expected such bright days for the digital currency. Since then, everything has changed and there is almost no one totally unfamiliar with the concept. Although there is not a long history behind it, cryptocurrency is quickly turning into a big threat to conventional money. The global market volume of cryptocurrency is anticipated to reach $1,758 million by 2027 with an 11.2% compound annual growth rate.
Needless to say, the advantages of cryptocurrency are so numerous that the popularity is soaring fast. It is getting more and more widespread, used as one of the newest digital payment technologies in an increasing number of stores all over the world. Even some governments are using cryptocurrency as a bridge to receive their blocked money these days.
However, this is just one side of the story. Blockchain technology is not flawless. It comes with some defects and concerns, making it vulnerable. That is why this question arises:
What does the future hold for cryptocurrency technology? Is it going to fail, or can it put an end to using paper money?
The impact of coronavirus
Bitcoin plunged to $3,000 during the coronavirus pandemic and many thought the end of cryptocurrency had arrived; however, the downfall did not last long. The value climbed back to $10,000 again and is still increasing. Many cryptocurrency enthusiasts who were skeptical about investing in Bitcoin now believe that the post-COVID-19 era is like a golden time to jump into the train of cryptocurrency.
Teeka Tiwari, a former Wall Street trader who is now a cryptocurrency expert believes that the coronavirus will make the Bitcoin price fly up to $100,000 in 2020. This is a remarkable impact on the cryptocurrency world, probably generating a big adoption of Bitcoin and its family.
Bitcoin will remain the king
The fluctuations in cryptocurrency values, the legalization in some countries, the prohibition in others, and several other factors are making people dubious about the future of cryptocurrency. Although the opinions are totally different, most experts believe that cryptocurrency will maintain its position and can even reinforce it.
According to the CoinMarketCap, there are currently over 7,000 cryptocurrencies, and their total capitalization is $366 billion. While some years ago the concept was only known by geek developers and enthusiasts, it is rapidly becoming mainstream around the world.
Venezuela, Argentina, or Iran?
At least one country’s currency will highly likely fail soon. Argentina, Venezuela, and Iran’s currencies are losing their value to the minimum amounts in their history. This may lead to the mass adoption of Bitcoin among people there.
The Venezuelan President has recently announced that they are intending to release a national cryptocurrency, called El Petro. Many more countries are currently working on building their own cryptocurrencies, such as China, Tunisia, Senegal, Sweden, Singapore, Uruguay, Thailand, Turkey, and Iran.
The volatility will remain
The cryptocurrency market is unstable. This is one of its drawbacks; however, it can also make some investors millionaires. The volatility issue is because cryptocurrencies are still in the early stages of development.
Experts believe that the volatility of the cryptocurrency market will remain in the next few years since the market is highly impressionable by the news.
We will see a prime of new decentralized exchanges in the near future. Although DEXes are not yet ready for mass adoption, the future looks bright.
In DEXes, transactions will be made in P2P mode. There is no need for a trusted intermediary, leading to the elimination of transactions fees for users. Furthermore, DEXes are much more secure than centralized exchanges, as there is no point of failure.
The rise of cryptocurrency loans
It first seems to be a wild ride as digital currencies fluctuate a lot; however, it is getting more commonplace to lend in the shape of cryptocurrencies, and these are the reasons:
· The interest rate is low.
· The number of investors and traders who like to receive funds immediately has risen.
· The system of requirements for borrowers is so simple compared to bank loans.
The entire cryptocurrency loaning industry is estimated at $4.7 billion, and the number of cryptocurrency loans is growing.
New regulations to come
Maybe in the near future, stakeholders will shift from Wall Street to cryptocurrency; but, it is obvious that this will require more transparency and regulations in the crypto-market. Many governments and regulatory agencies around the world are giving increasingly more attention to cryptocurrencies, such as the U.S. Securities and Exchange Commission, Federal Bureau of Investigation, United States Department of Homeland Security, and the Financial Crimes Enforcement Network, which are the ones only in the U.S. In some countries, cryptocurrency has been recognized legally as a payment technology, and in some others, its usage has been banned.
Cryptocurrency is too widespread to be entirely prohibited, and if something cannot be prohibited, it must be regulated. They are rapidly integrating into the global financial system, and traditional financial institutions can no longer have a monopoly on managing financial flows. That is why the regulation of cryptocurrency is imminent and not prohibitable.