The Future of Cryptocurrency: What to Expect?

In today’s world of virtual reality, everything seems to have a digital counterpart – even money. It was not so long ago when cryptocurrency (bitcoin) was introduced in the market but it already made a promising impact in the way people make financial transactions. It was indeed a bumpy road. Since it was launched in 2008, the first ever cryptocurrency – Bitcoin – went through a lot of challenges, from getting hacked to problems with transactions, frequent lags, and other technical problems. Nevertheless, cryptocurrency continues to become more mainstream and many experts believe that it has a very bright future.

What lies ahead for cryptocurrency?

Governments to regulate digital currencies

With the growing security concerns on digital currencies which could affect a huge part of the business sector, there is no surprise that more and more governments are assessing how they can regulate digital currency. The Hong Kong Stock Exchange (HKEX), for instance, has proposed that firms and companies involved in blockchain and cryptocurrency, should be regulated under existing financial regulations. Meanwhile in the UK, the government is conducting an inquiry about whether to regulate digital currencies due to the opportunities and risks on consumers, businesses, and the government.

Governments may adopt digital currency as well

While some countries are thinking about regulating it, others are exploring the possibility of having their own versions of the bitcoin. The US Federal Reserve System, for example, is giving a thought about creating its own digital currency. According to Futurist and author, cryptocurrencies will displace at least 25% of national currencies by 2030. This is going to be a dramatic move and could involve long, long talks, debates and research. One of the reasons why is that cryptocurrencies have a unique nature than national currencies. Firstly, they are decentralized. That means, digital currencies can’t be controlled any person, government, or company. It is also going to be a long process, as it could have so many implications on taxes and the international trade and industry. Having a national digital currency could also lead to the decline of the banking industry, as it would cut out middlemen and banks with most financial transactions taking place online.

More and more investors are into it

With many governments exploring the idea of regulating and even adopting cryptocurrencies and with the growing number of digital currency applications, more and more investors are feeling more confident to place their money in this industry. Cryptocurrency has changed the way people use and transact. Right now, apart from trading, some investors earn by lending their bitcoins to others, just like typical personal loans online. In 2017, the price of one bitcoin reached an all-time record high of almost $20,000. What’s more, the cryptocurrency industry is just starting, which makes it even more appealing to investors. According to Russell Korus, CEO of a global cryptocurrency platform called EZ Exchange, cryptocurrency will have more impact on society over the next 20 years than the internet over the last 20 years.

Increasing scrutiny over digital money

Despite the great potential of cryptocurrency and its unique features (such as anonymity of transactions and its decentralized nature), one of the biggest challenges that digital money face until now is the fact that is also utilized in illegal activities including money laundering, smuggling, drug peddling, and weapons procurement. Cryptocurrencies also face certain limitations. There is always the possibility of one’s digital fortune getting erased by a computer crash or ransacking of a virtual vault. While the number of merchants that accept cryptocurrencies has steadily increased, they will still likely deter most people.

Crazy gains despite volatile markets

Currently, bitcoin price is $6,400. By 2022, however, billionaire investor Tim Draper believes it could go as high as $250,000. There sure is a problem with stability in digital money for a number of reasons – lack of regulations, decentralization, lack of institutional capital, and so on. Yet, despite the volatility, more and more expert predictions are getting optimistic about bitcoin’s future. Furthermore, the possibility of government intervention is likely to help make the cryptocurrency market less volatile.

Against all odds. There is a bright future that lies ahead for the cryptocurrency industry despite the hurdles it has gone through over the last ten years. But it’s too early for proponents to declare victory. Again, it’s going to be a long bumpy road… but definitely worth the journey.