While cryptocurrencies have been thought of as ‘just a phase’ or the ‘latest trend’ in the past, it seems that the tides are changing. More and more people are seeing that the world of crypto isn’t a flash in the pan. Instead, it seems like it is here to stay. Further to this, many financial and crypto experts agree that crypto coins could replace traditional fiat currencies.
This is quite the change from earlier this year. Many crypto investors were on the edge at the start of 2022. Massive climbs in the value of well-known crypto coins have been seen, with some climbing 409% over the previous year. However, the leading crypto coins started to trend downward in November 2021.
Some worried that the crypto market was heading for another sharp dip in 2022 – so what does that mean for the future of cryptocurrencies?
It turns out that the most positive market momentum of 2021 was overwhelmed by the bearish trends that took place in spring this year. We saw the stock markets dip due to a surging inflation. There was also the invasion from Russia on Ukraine and other macroeconomic challenges. Cryptocurrencies followed suit and did the same as the stock markets. The value of crypto coins dropped extremely quickly at this time, as did many other investment types.
So, what are the expert predictions for the 2023 market of cryptocurrencies and crypto investments?
Of course, it is impossible to say exactly what will happen. We also can’t confirm what the future of cryptocurrency is. But, while there are still more questions than answers, there are a few overarching themes of crypto that can’t be ignored. By being aware of these and understanding them, you will be able to make better crypto investing decisions as the crypto market continues to evolve.
For example, there is a huge push on regulation and acceptance of cryptocurrencies in the UK, US and other countries across the globe. We have also seen mass-market adoption of cryptocurrency payments by many well-known organisations as well as smaller businesses. Many countries across the world are also adopting digital currencies as legal tender to be used by their citizens and tourists.
We believe that the series of baby steps that started with the first ever crypto coin in 2009, are likely to continue for many years to come. As issues develop, they will be resolved. In turn, the long-term future of the crypto sector will begin to take shape. It is likely that the future of crypto will begin to crystalise towards the end of the year as governments and blockchain developers hammer away at their long-term plans for cryptocurrencies.
So, why could cryptocurrencies become the future of money?
One of the best-case scenarios for 2023 and future years is that regulators around the world come together and agree on a global framework for all cryptocurrency regulations. That may look unlikely today as countries are so spread apart on their acceptance of cryptocurrencies.
For example, the Central African Republic and El Salvador, they are using a crypto coin as an official currency. Meanwhile, in China, all crypto transactions are classes as illegal.
Based on this, it seems that global unity on crypto regulations is unlikely in the short term – but that doesn’t mean it’s not ever going to happen.
We can see that crypto regulations are moving forward, in the right direction, on a federal level. For example, The Biden administration has put together a highly qualified team. This team have been entrusted with steering the cryptocurrency regulation process. The team is led by US Treasury Secretary Janet Yellen and the Chairman of the Securities and Exchange Commission, Gary Gensler.
These are highly knowledgeable people that are setting the tone for future regulations. It is hoped that a workable system can be developed for investors, consumers, crypto businesses and traditional banks. This will ensure that there are informed regulators. These regulators will understand crucial and meaningful issues surrounding cryptocurrencies.
For example, the difference between a value storage system and a sophisticated ledger with smart contracts.
It seems that as governments across the world try and work out legal framework, as well as a taxation system, cryptocurrencies could soon find their way into digital wallets of consumers. It’s important to remember that cryptocurrency deserves some deep thinking and careful analysis from governments. This is why it will take some time. As a crypto investor it is likely that you will experience some uncertainty.
There are some reasons why the brighter future of cryptocurrency as the replacement of fiat money could be delayed.
For example, policymakers could drag their feet and even fail to reach a sensible regulatory framework for cryptocurrency in the next few years. Policymakers could also decide that crypto coins are only to serve illegal activities and therefore will not be allowed in some countries.
It is also possible that some retailers could be horrified by the unpredictable value of digital currencies. Therefore, they could insist on traditional cash or credit card transactions only. There could also be a sudden swarm of security breaches and failing technology platforms. Along with other threats to the security of blockchain-based payment systems, this could undermine public trust in cryptocurrencies.
If there was to be any combination of the above stated circumstances, this could result in a delay of cryptocurrencies becoming the future of money by several years. The future of cryptocurrencies could also look very different to what may experts imagined when it first began in 2009.
Looking forward to the very long term of cryptocurrency, it is unlikely that any government of group of nations would stop the use of cryptocurrency entirely. However, it would be possible for a government or group of nations to slow down the movement of cryptocurrencies throughout the world. They could also steer the final crypto product in various directions.
While these risks may sound hypothetical, they are in fact very real possibilities. The success of cryptocurrencies is down to the crypto community getting along with regulators from all different backgrounds, all over the world. If the crypto community fails to do this then it could through some massive challenges and hurdles into the journey, progress and ultimate success of cryptocurrencies.
The crypto marker is well known for moving in mysterious ways. It can sky rocket one year and the next year it can come crashing down. It is important that as a crypto investor, you are informed, and you have done your research. This will help ensure that in the long run, you can withstand any dramatic setbacks for potential future investment success.
Financial analysts and crypto experts believe that crypto will make a superb return as soon as normal economic activity resumes in the UK and across the globe.
This is why now could be the perfect time for you to start your journey in crypto investing. Contact our crypto team now to find out more.