The last 18 months or so have transformed the cryptocurrency world and it has grown faster than ever before. Due to the pandemic, more and more people have ventured into crypto trading for the first time and prices of certain cryptocurrencies from Ethereum to Floki Inu have inflated drastically. But what does the future of cryptocurrency hold? Here, we’ll look at some of the possible forecasts for crypto.
Over the next year, experts say you can expect continued conversations about the regulation of cryptocurrency across the world as lawmakers are trying to figure out how to establish guidelines to make cryptocurrency safer for investors. In 2021, China revealed that cryptocurrency transactions are being made illegal in the country, whereas in the US, things are less clear. Although there is no intention of banning cryptocurrency in the US, there have been comments on the Commodity Future Trading Commission’s role in policing the industry. Regulation comes with its hurdles, and clear regulation would mean the removal of a roadblock for cryptocurrency since US firms and investors are currently operating without clear guidelines.
With new regulations, crypto tax reporting provisions could make it easier for the IRS to track activity among Americans. Regulations may also affect the price of cryptocurrency in volatile markets which is why experts are recommending any investments be kept at less than 5% of your total portfolio.
Broader Adoption of Cryptocurrencies
In the future, you can expect more mainstream companies among multiple industries to take interest just as they have over the past year. More and more companies are jumping on the crypto bandwagon and even fintech companies like PayPal and Square are betting on crypto by allowing users to buy on their platforms. Tesla are continuing to go back and forth on its acceptance of Bitcoin payments and experts predict more and more buy ins. Some experts are predicting even bigger corporations to adopt cryptocurrency exchanges in the latter half of the year like Amazon or bigger banks which can create a chain reaction that adds credibility.
With larger corporations adopting cryptocurrency, more and more people are likely to start exchanging in cryptocurrency which could have an impact on the prices. Although nothing is guaranteed, if you buy cryptocurrencies as a long-term investment, you may find an increase in value once the ‘real world’ starts using it.
Bitcoin is the largest cryptocurrency on the market and is the original crypto. Because of this, it’s a good indicator of the market in general. In the latter end of 2021, the price hit an all-time high at over $68,000. For 2022, many experts are saying it’s only a matter of time until the Bitcoin price hits $100,000 and there’s a lot of volatility expected in the short and long term.
For investors, this means you need to play a steady long game and if you’re investing for long-term growth, then don’t worry about the short-term volatility. Avoid looking at your investments as emotional reactions can cause investors to act rashly.
Cryptocurrency Could Be the Future of Money
With highly knowledgeable people setting the tone for future regulations, there’s hope that a workable system may be developed for investors, businesses, consumers and banks. Many retailers are also likely to start accepting payment in cash-like digital currencies like Bitcoin or Litecoin. The increase in the use of cryptocurrencies should spur regulatory agencies and politicians to take action and the blockchain could benefit from more widespread use.
In 2013, the world’s first ATM machine was installed in Canada. And more recently, the owner of two NYC bars has said they’re looking to carry out the first crypto-only restaurant in the US.
There’s a general divide when it comes to the adoption of cryptocurrencies in everyday life with older generations typically being more sceptical of the long-term viability. The fears are around volatility and uncertainty over how they actually work. More than a third of millennials believe that cryptocurrencies will soon replace cash and credit cards and many people around the world believe there will soon be a purely digital currency.
NFTs stand for nonfungible token which is basically a new way to determine ownership of digital property using a blockchain ledger. NFTs are popular in the art and collectibles scenes, however the potential goes far beyond eccentric digital artworks. NFTs are also used for digital land purchases, music ownership and much more. The future should get ready to see NFTs more often – they could be used as a concert ticket, to log into your favorite video game or to prove your identity. Some of the biggest brands are already working to expand on the application of NFTs to use in the consumer product industry, but this could be just the tip of the iceberg!