Future of Cryptocurrency will undoubtedly revolutionize financial sector in the Next Decade. Here’s Why
Bitcoin Adoption
There are so much opportunity in the cryptocurrency space, every week there seems to be new development and more disruptive technology build in blockchain.
However, the market volatility is extremely high and just only last 3 weeks there has been a 40% crash in the market, an estimate of 1.5T market capitalization has been wiped off.
Despite that, more and more cryptocurrency adoption by countries are increasing, just last week Nayib Bukele, President of El Salvador has declare Bitcoin as a legal tender.
Recently, President of Tanzania has told Central Banks to embrace cryptocurrencies as local currency depreciate in value.
More countries with a depreciation local currency are more likely to explore the future of cryptocurrency.
The Key Important Factors to be Discussed:
- Traits of Crypto and Fiat. What are the differences?
- External Factors That Affect The Price of Crypto
- Institutional Adoption are Here
Traits of Crypto and Fiat
Adoption will more likely to continue as cryptocurrency like Bitcoin are deflationary asset, meaning purchasing power will increase overtime.
Here are some key factors why it could potentially disrupt the financial sector:
- Cryptocurrency like Bitcoin are fully decentralized where they don’t rely on any intermediary like Banks to process the transactions. This is to also prevent intermediary double spending digital currency under the financial sector. Financial Sector can print more paper money overtime and devalue local currency. Bitcoin has only a circulating supply of 21 million making it a deflationary asset and a hedge against inflation
2. Cryptocurrency are run by blockchain technology, where all data are stored in a transparent and distributed ledger.
3. Cryptocurrency are secured by cryptographic technology making it nearly impossible to be hacked. However, if individuals were to store their cryptocurrency in a centralized exchange, there is potential where exchanges get exploited and hacked overtime.
With the security of cryptographic technology can provide, more will realize the advantages of holding cryptocurrency under own custody and will embrace the future of cryptocurrency.
The Table below Shows the Characteristic of Cryptocurrency in compare to Fiat Currency:
External Factors Affecting The Future of Cryptocurrency Price
Despite the good attributes of cryptocurrency, there are some risk factor in cryptocurrency. The value of cryptocurrency fluctuates greatly from time to time and there are several external factors that might change the market sentiment making every investor go through an emotional roller-coaster.
Social Media
Just recently Elon Musk has tweeted that Tesla would accept Bitcoin in the future if only the Bitcoin mining has less impact to the environment.
Adding that “Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market.”
The market reacts and Bitcoin price soared on that day after Elon Musk’s tweet.
Regulations
Last 3 weeks, China has announced that crackdown on Bitcoin mining at the province of Xinjiang has cause massive panic and the price of Bitcoin plummet over 10% on that day. Large economy countries posting regulatory or crackdown on cryptocurrency like Bitcoin could high affect the sentiment of market quickly causing mass panic in the space.
Institutional Demand
Michael Saylor, CEO of MicroStrategy has recently purchase $500 million worth of Bitcoin and holding an estimate of 92,079 Bitcoins in their company balance sheet. Same goes to Tesla when they announced a $1.5 billion Bitcoin purchased caused a massive rally in cryptocurrency space. Market Capitalization soared above 2T.
Image from Getty Image. Future of Cryptocurrency
The Future of Cryptocurrency is potentially promising But DYOR.
Without proper knowledge of the cryptocurrency space will be risky as it tends to be affected by external factors. Many will panic sell at a loss if unsure what is happening in the market.
Banking Giant Goldman Sachs and Morgan Stanley has recently made headlines saying that Bitcoin will be classify as a new asset class and will start offering high net worth clients to buy Bitcoins.
More and more Financial Institution will slowly follow and adopt the future of cryptocurrency.
Mark Cuban’s Maverick Store is currently accepting Dogecoin for payments. There are many forms of cryptocurrency payment being accepted around the world and it will slowly increase the volume of transacting cryptocurrency.
Many people without banks will slowly get accessed to cryptocurrency with the use of mobile phones that they can simply create a wallet to transact cryptocurrency.
It is undoubtedly one of the best innovation and could potentially see the future of cryptocurrency revolutionize financial sector in the next decade.
Read more at https://dailytokenomics.com/how-to-get-bitcoins-for-free/
Originally published at https://dailytokenomics.com on June 15, 2021.
