It is true to say that cryptocurrency has been unpredictable in the last year or so. Apart from the rapid rise and decline in prices, increased regulation, hacking into exchanges and confusion has raised many questions about whether crypto is going to reach its ultimate goal. While we all agree that cryptocurrency is here to stay, its future might be different from what we thought about it three to five years ago. This article explores the future of cryptocurrency and the decisions that may determine its trajectory.
Cryptocurrency Will See an Increase in Use
One thing is for sure: cryptocurrency will experience an increase in overall use in the near future. More people are appreciating the convenience and security that come with the use of cryptography. Therefore, they will be willing to use it in their daily transactions.
In addition, many outlets are now incorporating cryptocurrencies into their list of accepted payment methods. Some exchanges are also providing their customers with cards that they can use for instant crypto payments. This has helped increase the general use of the currencies.
Online merchants, casinos, video gaming platforms, and brick-and-mortar stores are some of the areas where you can buy goods and services with cryptocurrencies. If you are into casino gaming, you may check out some of the best rated Litecoin casinos for Kiwis and have fun.
More Crypto ETFs will Come In
The US Securities and Exchange Commission commissioned the first Bitcoin exchange-traded fund (ETF) in October 2021. The fund has attracted an overwhelming number of investors. In fact, it hit the $1 billion mark in a few days. It also controls a huge portion of the Bitcoin futures markets.
The Bitcoin ETF works by entering into long positions for near-term crypto futures contracts. When these futures near their expiration, it gradually sells them and picks up other longer-dated contracts. It also has a liquid pool of cash or related cash equivalents. If the futures contracts go up, it uses the profit to increase liquid cash, but when there is a loss, it pays for the difference with the pooled cash.
We expect to see more of these exchange-traded funds around the world. Once a good number of countries pass legislation that creates a framework for the working of such funds, it will be easier for anyone to safely invest in some cryptocurrency.
More Legislation is On the Way
For a considerable time, there has not been any legislation that has protected the cryptocurrency market. The unregulated market allowed for an increase in scams, with a considerable number of people losing their investments. However, now governments around the world have woken up to the occasion and are putting in place legal guidelines for the crypto market.
Recently, the European Parliament approved the formation of MiCA (Markets in Crypto Assets), which helps bring cryptocurrency under government regulation. Other countries, such as Switzerland and Japan, have meticulous regulations in place to manage these currencies.
In the future, we expect more legislation to be introduced. While most countries will not be trying to centralize the market, they will effectively reduce some freedoms while increasing security and stabilizing different currencies. Unfortunately, some laws will be restrictive, especially in countries that frown upon crypto markets.
Decentralized Finance Might Be the Fastest Growing Sector
Two developments in the cryptocurrency market—decentralized autonomous organizations (DAOs) and decentralized finance (DeFi)—are some of the most innovative developments in the industry. DAOs use blockchain technology to enhance automation in both voting and the processing of transactions. This smart contract technology will be key to managing blockchain innovations.
On the other hand, a DeFi is a financial system that is built on blockchain. It helps users borrow and invest through the use of smart contracts. DeFi will play a role in helping organizations raise capital while enabling lenders to secure their cash. Besides, it enables small investors to put their money into large businesses where ordinarily the minimum investment would be large.
These two innovations will play a huge role in the growth of the industry. They will also play a significant role in financing businesses and other innovations within blockchain technology. Expect increased use of these technologies in the future.
There will be Fewer Meme Coins
Meme Coins are crypto assets that are inspired by internet memes. The prevailing social media culture keeps them alive. In most cases, these coins are supported by a large group of dedicated enthusiasts.
In the recent past, there have been several notable meme coins, such as Shiba Inu, Dogecoin, Pepe Coin and Floki. All these coins do not have any inherent value beyond their community (Dogecoin was a spin-off from this rule) and are quite volatile.
We expect the number of meme coins to go down in the near future. For these coins to move up in value, they are usually supported by leading social figures that are in short supply. Besides, many people are now focused on hard crypto to make some cash rather than playing with highly volatile options.
The cryptocurrency future continues to shape up as new events enter the market. The changes in the legal arena, the market itself and new innovations will play a role in shaping this future.