The cryptocurrency market is growing at an unprecedented rate. However, it’s still important to understand where you can take advantage of opportunities and where you need to keep your guard up.
Whether you’re looking to trade coins, start mining operations, or invest in ICOs, some trends you should be aware of will affect how the market evolves over the next few years.
In this article, we’ll look at eight cryptocurrency trends that are likely to change how we all use cryptocurrency in the future.
1) Legalization of Digital Assets
India has yet to regulate cryptocurrencies, but going by what Nischal Shetty – CEO of a cryptocurrency exchange WazirX said at a recent event, regulation could be imminent.
The government has already set up an inter-disciplinary committee to study various aspects of virtual currencies and recommend appropriate regulations.
According to industry experts, once cryptocurrency trading is legal in India, it will become easier for crypto exchanges like WazirX to get banking services.
This will also help reduce instances of fraud and theft that have plagued cryptocurrency markets globally.
2) Fiat-To-Crypto Trading
One of crypto’s biggest flaws is that it’s traded exclusively through fiat exchanges—meaning you need a bank account (and a lot of luck) if you want to trade.
According to the top cryptocurrency exchange software development company in India, at least one country will have adopted an open-door policy toward crypto trading by 2022.
This will allow anyone with Internet access to sign up and buy cryptocurrency without having a bank account.
This will bring cryptocurrency into the reach of many more consumers, paving the way for widespread acceptance.
3) Trusted Bitcoin Custodians Emerge
As cryptocurrency becomes more mainstream and people start trusting it to store value, new services will emerge that specialize in holding customer funds.
These trusted custodians will work like today’s banks, with encryption technology ensuring customers that their assets can be retrieved should something go wrong.
As these companies build trust over time and demonstrate a willingness to protect customer information, they’ll become increasingly essential components of every cryptocurrency system.
4) International Digital Currency Standard Emerges
In 2018, several cryptocurrency industry organizations, including Hyperledger and Enterprise Ethereum Alliance, began collaborating on various blockchain projects.
This came about as part of an effort to develop and implement technical standards that would ensure compatibility between different digital currencies.
In fact, their collaborative efforts will culminate with developing an international cryptocurrency standard that could help facilitate payments between users who hold different types of digital currency.
5) Central Bank Digital Currencies Launch
With digital currencies such as bitcoin and litecoin on one side, central banks may soon launch their variants. Some major banks have already been trialing digital versions of their fiat currencies.
It’s still too early to say which country will be first out of the blocks with a central bank-issued cryptocurrency (CBDC), but it could shake up global finance significantly.
CBDCs could become a necessary new means of payment and unit of account—or simply gather dust.
6) Safe Haven Cryptocurrencies Emerge (gold, silver, and other asset-backed cryptocurrencies)
Many cryptocurrency investors are still wary of cryptocurrency’s volatility, preferring to invest in assets that have proven over time to be a haven (i.e., an asset whose value doesn’t fluctuate greatly).
To satisfy such market needs, gold-backed and other asset-backed cryptocurrencies will emerge by 2021.
However, investing in precious metals comes with considerable fees, making it difficult for smaller investors and average citizens of less developed countries to participate.
7) ICOs Revolutionize Access to Funding
In 2017, ICOs (initial coin offerings) changed how companies raise money. In a sense, it has revolutionized access to funding. As a result, it is no surprise that ICO-backed projects have raised more than $6 billion.
Now, cryptocurrency companies are working on their spin-off of ICOs with their unique variant of crypto exchanges. These cryptocurrency exchanges will enable traders to trade stocks and digital assets safely and efficiently.
8) Fintech Innovations Reach Critical Mass (blockchain scalability, quantum computing resistant cryptography algorithms, etc.)
As a decentralized network, cryptocurrency is inherently resistant to centralized regulation. However, as cryptocurrencies become increasingly popular, so make governments’ attempts at regulation and control.
As more people use cryptocurrency and as various cryptocurrencies reach critical mass across multiple markets—such as remittances, banking services, etc.—governments will increasingly attempt to regulate crypto exchanges to exert centralized control over crypto-related transactions.
Read Also: Cryptocurrency Trading: A Detailed Overview
Conclusion
Cryptocurrency has become a popular form of payment in an increasingly digitalized world due to its convenience and speed.
While skeptics question whether it can be considered a currency, cryptocurrency software development company in India is working on taking advantage of blockchain technology’s potential.
Blockchain offers solutions for scalability issues that Bitcoin has experienced over time, but it also provides a unique system of security using its decentralized nature.
This means that if anyone user were to lose their wallet or private key, there would still be no way for someone else to access their funds.
The value of cryptocurrency will continue to rise as more companies adopt blockchain technology into their systems, and savvy investors are making sure they get in on these trends early by investing in ICOs before they take off.
We hope you enjoyed our list of top 8 cryptocurrency trends we think you should watch out for!
