Expecting the expected — Summarizing Cryptocurrencies Future | by Asredwanr | Tech Alchemy | Nov, 2022

The future of Cryptocurrency remains quite interesting, while some swear that it will flourish in the coming years, some might agree that regulation and taxation might affect its rates, in order to get an accurate view, it would be better to first examine the recent history and project how it would change over time. The following factors should be given close attention in examining the following report:

  • Regulations to each specific country (can differ greatly based on existing regulations in some countries)
  • Mass-market adoption of cryptocurrency payments
  • Exchange trade funds based on bitcoin
  • Countries adopting bitcoin as a legal tender (At the moment, it is El-Salvador and the Central African Republic).

There are many factors to consider regarding the growth and sustainability of Cryptocurrency, not limited to geography, regulations, market, customer segments, and brand interest. An Allied Market research report believes that the Cryptocurrency market will more than triple by 2030. More than 60% of the segment is expected to remain in the mining segment and the main drivers will be increased demand for international remittances and more transparency in global payment systems. This number is also based on regulations implemented by different countries, for example, the Asia-Pacific Crypto industry will be the fastest growing due to the increasing competition from a growing number of exchanges.

Many of the current crypto users project the potential through expressing their financial freedom and moving away from traditional and rigid banking. In the US alone, consumers over 35 years old make up nearly half of those who are expected to invest long-term in cryptocurrency. The increasing participation of various institutions and firms as well as regular users allows them to use Cryptocurrency without a need for an address, allowing for a wider range of users and flexibility. This allows the blockchain to be safe, updated, and secure. The network of Bitcoin is believed to be controlled by a number of major companies, and 50% of them are Chinese mining pools. This can change the structure of the market depending on their influence, one example that can project the fragility of the market regards the incident of the sudden 20% increase in the price of bitcoin from Tesla when Elon Musk posted a hashtag of “bitcoin” on Twitter, this can also shed more light on how democratic the market can be.

“In one best-case scenario for 2023 and beyond, Regulators around the world might come together on a global framework for crypto regulation” — Anders Bylund of the Motley Fool

In the below survey around 5,400 internet users aged 16–64 have heard of cryptocurrency before across 4 markets, of which 626 are currently invested in cryptocurrency, and 963 are interested in doing so.

This group was asked the following question: “What do you think are the biggest benefits to cryptocurrency, if any?” and “What do you think are the biggest drawbacks to cryptocurrency, if any?”

Since everyone has their own piece of the cake given that Cryptocurrency is a decentralized financial asset, investors are now agreeing that regulations should be implemented, however, the concern lies amidst who will execute it and what the nuances will consist of. The concept of regulation is increasing and is having a wider range of support.

“Cryptocurrencies aren’t really trustless at all. They are still reliant on the underlying infrastructure powering cryptocurrencies like Bitcoin, much of which is located in China. The Chinese government could theoretically make changes to cryptocurrencies at a fundamental level by imposing its will on the data miners who keep them running.” — Professor Grundfest of Stanford University (Center for Professional Development)

It is interesting to consider that government oversight will have a huge impact on the market structure as well as the potential investment in the future. Some of the benefits include the belief that greater regulation could equate to enabling more widespread businesses to accept digital currencies and increasing their security from fraud, all while reducing volatility and suspicious criminal activity. However, this can also contradict many of the current benefits of peer-to-peer structure and anonymity in the market due to its decentralized nature.

The interesting factor to consider is that no currency can sustain itself without regulation in the long term. Finding this perfect middle-ground will pose a great challenge due to the regulation of a “lawless” commodity while simultaneously satisfying coin exchangers, investors, and different bodies of investors alike.

Naturally, you are probably wondering which type of government bodies and investors will play a role in this, after all, it relies on their hand as the weight of the market is dependent on their investments, literally.

“The 2022 crash in the crypto market has hit the world of derivatives, possibly eliminating a major source of volatility.” — Enrico Colombatto, Professor of Economics in Italy

Around 7000 internet users aged 16–64 in five different markets who have heard of cryptocurrency before, 1,000 of them who were already invested in cryptocurrency were asked the following question “Which of the following institutions would you most trust to lead regulation of cryptocurrency?

While this is not a completely accurate reflection of a specific region, it can be addressed to the general aspect of the market. Building trust and credibility (even as a governmental entity) is key to attracting and retaining a large share of consumers. This presents a potential opportunity to become a trusted partner or educator if need be. The potential can reveal itself in due course of time.

“Ignore, ban or regulate? Governments will likely choose the third option” — Enrico Colombatto, Professor of Economics in Italy

In summary, One thing is certain, the market will experience significant change (factually and statistically) in five years’ time as it has five years ago. While the future will likely be decided by the regulators, it can also be influenced by many brands that can fill in the gaps in this ever-growing market. Many instances in the market that can raise attention is Sean Culkin of the Kansas City Chiefs, a famous NFL player, who converted his salary fully to bitcoin in April 2021, later that year in June, El-Salvador became the first legal tender to approve legislation of bitcoin. The end of July 2021 marked the launch of the Bitcoin Strategy Profund as the first open-end mutual fund that tracks the price of bitcoin in the US. This is not limited to becoming an educator in the field, providing safety in this rather unconventional sector and even offering recognizable brands for sale in value. A huge part of this is establishing a firm understanding of what the “mainstream” audience needs and how their interests will shift over time.

There might be better strategies to have bitcoin in countries where currencies are weaker, whatever the case — there is much further work and study to be done regarding the investment in risk and reward, but the bright side is considering how the structure can change with the entry of influential brands, investors with strong financial leverage and introduction market regulation.


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Author: Traciwininger

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