As they have grown to be the talk of the entire world, uprooting our idea of what money is (and isn’t!), and booming to a multi-billion dollar market, cryptocurrencies have surely changed the world and have many eager to buy in. While this lush market has made many people billionaires, one thing that has many wondering is the future of Bitcoin and other cryptocurrencies. Where will they go from here? And what will happen to this market that seems to be unstoppable? Seeing how some of the best predictors for future trends are past ones, we find ourselves looking at Bitcoin and cryptocurrencies’ trajectories over the past years to assess where they will be next, and how they will continue to shape our financial world.
During the fourth quarter of 2021, we all witnessed Bitcoin rise to new all-time highs that have challenged everyone’s perception of what is possible for this coin. While many initially shrugged it off as a bubble, ideas began to change when major corporations and even financial institutions like banks began assessing the many different ways they could benefit from Bitcoin. Mainstream companies across various industries have taken an interest in crypto, with the likes of PayPal and Tesla adopting it openly.
In so many ways, 2021 has been a year of breakthroughs for cryptocurrencies and Bitcoin, many of which have happened in ways that many did not think were possible. For example, the first Bitcoin Exchange Traded Fund (ETF) was approved in October of 2021 and managed to break a record on its very first day when it brought in over a billion dollars worth of transactions. In general, as these cryptocurrency assets become more accessible, more people can buy in and influence the market thus catapulting it even further into the mainstream. This is what experts anticipate will happen to Bitcoin and other cryptocurrencies as the process of buying and trading them become even more simplified.
When assessing how valuable cryptocurrencies and Bitcoin are for our world, we note that blockchain technology (the technology upon which cryptocurrencies are built) provides many solutions to real-life problems we are plagued with every day. The existing financial system is slow and subject to human errors, something that crypto aims to resolve through the use of technology and by leveraging the speed of transactions on the blockchain. Moreover, it challenges the idea of hefty fees that are often associated with financial transactions in traditional institutions (like banks). Trading and purchasing fees associated with cryptocurrencies are often significantly lower than traditional fees, with some even being nonexistent.
In terms of crypto regulation, we have seen the Securities and Exchange Commission (SEC) begin to interact more positively with the crypto community and digital assets. The SEC has also signaled that they will not be blocking investment funds that track Bitcoin and other cryptocurrencies. Federal Reserve Chair Jerome Powell even revealed he has no intention of banning or limiting the use of cryptocurrencies, and another sigh of relief was heard when SEC Chairman Gary Gensler said the SEC also has no plans to ban cryptocurrencies. These statements increased confidence in the fact that there will be no cryptocurrency crackdown in the future, increasing confidence for timid investors who have always feared losing out should regulation be imposed harshly.
In regards to institutions and how they are dealing with cryptocurrency, the outlook has been and continues to be bullish. Global intermediary firm TP ICAP Group is working to launch a cryptocurrency trading platform that caters to investment banks and hedge funds, a clear sign of continued institutional interest in crypto and digital assets. Moreover, multinational investment bank and financial services company Morgan Stanley purchased millions of dollars worth of Bitcoin during a brief pullback in prices.
Other financial services companies like payments solution provider MasterCard have pulled the trigger on crypto, with MasterCard rolling out a 3% crypto cashback credit card in order to incentivize its customers to use crypto. They join Visa who also released a similar program last year. Despite the market’s inherent volatility (which is also what makes it a very lucrative one), investors and various companies remain bullish. As more companies offer up Bitcoin and crypto services, promote the use of cryptocurrencies, and begin catering to this vast and enormous market, it is undeniable that it is bound to continue to grow.
By providing many solutions to real-life problems that plague the financial world, and by garnering enough interest across various industries ranging from investment to art and sports to cross-border payments, cryptocurrencies have proven their value in many different markets. While no one can truly speculate the exact value of cryptocurrencies and Bitcoin down the line, it appears as though most seasoned investors are bullish and that cryptocurrencies and Bitcoin are here to stay. That is why it’s the right time to dive into the crypto-world and you can start by joining Dchained.