Cryptocurrency Market Outlook: What The Future Holds For The Industry
The past few years have been critical for the cryptocurrency market in terms of growth and global recognition. Notably, the cryptocurrency surge of 2017, which plunged digital currencies into the spotlight, which certainly ignited people’s desire to know more about cryptocurrencies.
Alongside that recognition came positive developments such as overwhelming growth in value for digital currencies, as well as blockchain-based events. However, there were also some negatives, such as cryptocurrency market theft, ICO scams, and the fall of the cryptocurrency market. These developments, whether positive or negative, are critical in painting a better picture of what the future of the industry.
Regulatory situation
The G20 countries, which consist of European Union countries and 19 other significant countries, might soon implement more stringent know-your-customer (KYC) requirements for businesses in the cryptocurrency sector. It will probably happen in the future as part of safety requirements aimed at preventing fraud and crypto theft.
Cryptocurrency-based businesses have expressed their dissatisfaction with the regulations which they describe as draconian and unattractive, especially from a privacy standpoint. They view the proposed KYC regulations as draconian, especially because they violate customer privacy.
Cryptocurrency industry representatives had a meeting with the Financial Action Task Force (FATF) on money laundering earlier in May to talk about cryptocurrency-related matters. The meeting was held in Vienna, and industry regulation was one of the subjects discussed. The FATF’s regulatory draft states that all digital asset service providers will need a license to operate. It also says that service providers have to subject each transaction over USD 1,000 or EUR 1,000 to a KYC check.
More legitimacy in the market
The cryptocurrency market is experiencing renewed energy and interest in digital currencies, and this is evident by the surging cryptocurrency prices. The problem is that increased interest also attracts cryptocurrency scammers and hackers, as was the case in the past two years, during which many investors lost in their crypto-investments.
There was a lot to learn from past mistakes, and so, fortunately, most cryptocurrency exchanges have adopted better measures to prevent crypto-heists. It means that the future will be characterized by fewer reports of exchanges being hacked and cryptocurrencies stolen.
Regulatory oversight will also play a role in reducing malpractices by crypto related ICOs. It is also likely that cryptocurrency investors will also adopt safer investment strategies.
Many people lost money through initial coin offerings (ICOs) in 2017 and 2018, and so authorities jumped in by implementing regulations to streamline things. Investors can now safely invest in cryptocurrency crowdfunding activities through Security Token Offerings (STO).
Blockchain adoption
Blockchain adoption has been picking up the pace, especially in the banking sector as significant banks realize the power of the technology, as well as the potential impact on their services. It has inspired many banks to adopt the technology.
HSBC bank, which is based in London, recently revealed that it achieved as much as 25% savings by trading forex through blockchain technology. The bank handles about 3,500 to 5,000 trades valued at around $350 billion daily.
J.P Morgan who is one of the biggest Wall Street banks, also ventured into the blockchain arena through its cryptocurrency that it will use to expedite the pace of institutional settlements. Meanwhile, the University of Michigan committed to investing an undisclosed amount in the a16zcryptocurrency fund launched by Andreessen Horowitz.
The cryptocurrency and blockchain sectors expect more growth in the future, especially with the growing interest from major firms, especially from the Banking industry. The involvement of significant companies and institutions will likely encourage other firms to go down the same road so that they can keep up with the competition.
The price situation
There have been many predictions about cryptocurrencies in the past, particularly about their prices. For example, some analysts predicted that Bitcoin would continue to lose value after the massive bear market that prevailed in 2018. Although the currency demonstrated a slow performance for some time, the recent surge proved that the cryptocurrency market is still alive and kicking. For many, this means that 2017’s massive bull surge was not a fluke, and thus encouraging more people to get in on the action.
Some market experts believe that the cryptocurrency market will soon gain stability, but the latest rally highlights the current volatility in the market. Moving forward, cryptocurrency prices look like they want to test previous highs. Meaning, we could soon see $20,000 bitcoin.
Some digital currencies will gain popularity
Some cryptocurrencies are expected to become more popular, especially with the adoption of their blockchains or even upgrades.
· Bitcoin’s Lightning network is scheduled to receive an upgrade that will allow the cryptocurrency to become even more popular among investors as a store of value. That is perhaps one of the things that have lately been driving up its price because investors have been using it as a haven due to the higher risk in the fiat currency market.
· EOS has been competing with Ethereum to become the new go-to blockchain system for technology adoption. This rising popularity will also influence the performance of the Eos cryptocurrency.
· Ethereum (ETH)is one of the significant cryptocurrency, and it has almost always enjoyed considerable attention every time the price of Bitcoin experiences surges. Its Ethereum platform became popular due to smart contracts, but its downside is the scalability problem.
· Cardano (ADA) is also one of the cryptocurrencies that are in a position of leveraging massive growth in the market, especially as a digital currency that focuses on governance and monetary policy. These are issues that lawmakers have insisted on, and so it is easy to see that Cardano will likely continue to gain value. Cardano also plans to become the leading blockchain network for smart contracts.
· Ripple (XRP) is also among the most common or widely known cryptocurrencies, and this is one of the cryptocurrencies that have a promising future. It is mainly because its developers want the Ripple network to be used for interbank transfer or money, thus competing with the Swift money transfer platform. Ripple might; therefore, become popular in the banking sector.
