Future of Cryptocurrency
When 2022 arrived, cryptocurrency investors were on edge. Bitcoin, the most popular cryptocurrency, saw a price increase of 61%, and Ethereum’s price had increased by 409% since last year. The top coins began to trend downhill in November 2021, after the previous significant spike in 2017, followed by an ice bath in 2018. Was another dramatic correction in the cryptocurrency market imminent?
Ultimately, because of growing inflation, Russia’s invasion of Ukraine, and other macroeconomic challenges, bearish trends in the spring of 2022 overwhelmed the mostly upbeat market momentum of 2021. Following suit, cryptocurrencies declined significantly more quickly than the S&P 500.
The 2023 calendar may clarify issues that went unresolved in earlier years, charting a long-term future for cryptocurrencies and the investors who support them. Here is what to anticipate.
Predictions for the cryptocurrency market in 2023
It’s hard to predict what the bitcoin market will look like in 2023 and beyond. Still, there are more questions than answers. However, by keeping an eye on a few overarching crypto themes, you can make better-investing selections as the market evolves.
The following information requires special attention:
- Regulation in the United States and abroad
- Adoption of bitcoin payments on a large scale.
- ETFs are based on Bitcoin and other digital currencies.
- Countries have adopted Bitcoin (or other digital currencies) as legal money.
The long-term future of the cryptocurrency industry will take shape as these problems emerge and are fixed. As governments and blockchain developers continue to complete their long-term cryptocurrency plans, the image might start to take effect by the end of 2022.
However a series of baby steps that began with the development of Bitcoin in 2009 will probably go on for a very long time.
Why cryptocurrencies may be the money of the future
In the best-case scenario, regulators worldwide may agree on a global framework for cryptocurrency regulation by 2023 and beyond. That, however, appears improbable given the current global attitudes about cryptocurrencies, which range from “Crypto transactions are banned” in China to “Bitcoin is an official currency” in El Salvador and the Central African Republic. Soon, world unanimity on the subject seems doubtful.
Federal crypto regulations, however, are progressing. The U.S. Treasury Secretary Janet Yellen and Gary Gensler, chairman of the Securities and Exchange Commission, lead a highly skilled team assembled by the Biden administration to guide the cryptocurrency regulation process. Yellen has been monitoring the market for years, but occasionally with skepticism.
If highly knowledgeable people set the tone for upcoming rules, a workable system might be constructed for investors, consumers, bitcoin companies, and traditional institutions. An important issue that knowledgeable regulators will be aware of is the differences between a value storage system like Bitcoin and an advanced ledger with smart contracts like Ethereum. Congress proposed several crypto regulatory measures in the first half of 2022, but the bureaucracy moves slowly, and this subject requires some careful thought and analysis.
Cryptocurrencies may find their way into the digital wallets of U.S. customers on a massive scale as government organizations hammer out a legal framework and taxation structure. Even though Bitcoin will be legal cash in El Salvador in 2021 and the Central African Republic in 2022, the United States is unlikely to follow suit anytime soon.
Many merchants, however, are likely to begin taking payments in cash-like digital currencies such as Bitcoin, Litecoin (CRYPTO: LTC), or Dogecoin, a clone of Bitcoin (CRYPTO: DOGE). Increased use of cryptocurrency should force regulatory authorities and politicians to act more quickly, and blockchain technologies should gain from widespread adoption.
Over the next few years, the processes will seep across the crypto economy. Investors can’t bear uncertainty; therefore, even a highly stringent regulatory framework is likely preferable to the current state of affairs.
Also Read: Bitcoin – All you need to know
Why cryptocurrencies may not be the money of the future
- In the coming years, policymakers can procrastinate and fail to create a practical regulatory framework.
- They might determine that criminals and bad people exclusively use money like Bitcoin and Litecoin and that none of such behavior belongs on American soil.
- Retailers can object to the volatile value of digital currencies and demand that customers pay with cash or credit cards in an old-fashioned way instead.
- A sudden wave of security lapses could damage the public’s confidence in digital currencies, failed technological platforms, and other security issues.
In any of these scenarios, the digital currency revolution could be set back by several years. And if it occurs, it would look very different from the sea change sparked by Bitcoin in 2021. In the very long run, it is improbable that any country or set of governments will ultimately put an end to the cryptocurrency concept. Still, they can restrict it and influence the ultimate product differently.
Although these hazards may seem speculative, they are, in fact, authentic. The cryptocurrency community ultimately needs to get along with global regulators. Failure to do so could create significant obstacles in the way of the development of the digital currency industry.
Because of this, you shouldn’t place a large bet on Bitcoin, Ethereum, or cryptocurrency. This market tends to fluctuate in unexpected and erratic ways, surging one year and collapsing the next. For the long term, knowledgeable investors aim to create a diversified portfolio that can survive sudden and severe downturns in any given industry.