To help you understand what the future really holds for all things crypto, we have put together this piece with important aspects and facets of blockchain, which will shape the cryptocurrency market. Before delving into the topic, let’s take a sneak peek at the current state of affairs and how the journey has been so far for cryptocurrency.
How did we get here?
On its steep ascent to its peak in late 2017, Bitcoin came as a breath of fresh air full of innovation and revolutionary technology. It promised to disrupt the financial world forever. The Bitcoin aura was a general feeling of what people thought about cryptocurrencies — millions seemed to believe that Bitcoin was the next big thing in the financial world. This was evident from the burgeoning number of transactions per day.
Although the price of Bitcoin eventually took a dip to its current value of about $8,000, the crypto coin had paved the way for many other tokens and blockchain technologies, mushrooming all over the place.
With more related products popping up everywhere and whitepapers being published every day, cryptocurrencies seemed to lose the original buzz. People were getting ‘tired’ of the whole crypto narrative and this made the doubting ‘Thomases’ label cryptocurrencies a bubble that burst too quickly. But has cryptocurrency’s bubble really burst?
A bubble burst too soon?
Looking at the price nosedive of most coins since their peak, one can quickly conclude that cryptocurrencies have indeed seen their better days and the bubble has finally burst. But this is actually very far from the truth: there is still more to come.
The price stability of Bitcoin, Ether, Dash, Monero, and other major peer-to-peer currencies is an indication of an industry that is maturing and is finally finding its niche within the financial ecosystem. The early price surges experienced when the Bitcoin hype was at its highest was an indication of a still young concept, which was beginning to resonate well with new users.
The meteoric rise of Bitcoin’s popularity made the coin hit the headlines, which helped it expand further. Cryptocurrencies no longer make headlines unless it’s news on major cryptocurrency scams. But this does not mean that cryptocurrency’s fate is decided: there is still a bright future and cryptocurrency is yet to exploit its full potential.
Future of Cryptocurrency
Blockchain technology that powers cryptocurrency has a lot of potential to disrupt financial systems for good. However, there’s still a large rift between what cryptocurrency is capable of doing and what people are getting out of the technology currently. With such a rift, dreams of cryptocurrency replacing fiat currencies will only remain to be dreams unless numerous obstacles are overcome.
Obstacles such as lack of proper regulation and standardization of the industry result in people losing billions to scams every year. Some countries still don’t recognize cryptocurrencies as a form of legitimate currency. With these states not accepting the new form of money, the dream of globalization will not be achieved.
On the positive side of things, the adoption rate and the market value of cryptocurrency have been looking up every single day, which is a tell-tale sign that this asset class is really promising. The total value of cryptocurrency is estimated at over $200 billion, which is almost 10-fold what it was five years ago. According to Kenneth Rogoff, a renowned professor of economics at Harvard, the market cap of cryptocurrencies could even hit $5 trillion in the next 5 years if the current trend persists. The demand is, therefore, not showing signs of decreasing.
The number of daily transactions has also increased with more people jumping onto the bandwagon. The networks are getting more scalable, and the general incorporation of the technology into financial spaces is becoming a norm for all industries. This is enough evidence that cryptocurrency is making positive progress nowadays.
There are also talks of cryptocurrencies getting listed on NASDAQ, and this could potentially change the fortunes of cryptocurrencies for good. Financial experts also foresee a future in which cryptocurrencies have an exchange-traded fund. This would make them more trustworthy and easier to invest in, especially for the general public.
When it comes to investing in Bitcoin, there is still the aspect of volatility that will never desert the industry, no matter how mature it grows. Volatility will always remain to be a determining factor as the industry is basically dependent on the volume of transactions and the general adoption of the technology by the public.
Those with plans to invest in cryptocurrency should not expect that it will turn into a safe bet any time soon. The risks will always be there irrespective of how established the technology is.
Cryptocurrencies have a very long way to go. But the groundwork that has been covered in this decade will make things very easy to scale. Although many think that the future is bleak for cryptocurrency, financial experts are still optimistic. They believe that cryptocurrencies are a gem, and they will definitely change the way we transact in a few years. The demand will increase as more people want to use the technology, so we should all brace ourselves for the changes that will come with it.