Cryptocurrency has become a global phenomenon in recent years, with Bitcoin helping many early investors to make millions seemingly overnight in the early days – however, there is still a lot to be learned about this evolving technology.
Concerns around the capacity of blockchain to disrupt traditional financial systems have been swirling for some years now, and many remain sceptical that crypto will ever fully make its way into the mainstream – but in spite of this, we’ve seen everyone from luxury travel operators to premium car manufacturers taking steps to incorporate Bitcoin and its counterparts into their business models. Whichever way you look at it, it seems that crypto is just getting started – but just what are the developments we can expect to see in this field next?
From inception, we have seen a steady shift of money and value from brick and mortar companies over to online platforms, and it’s a trend that we’re set to see continue. The issue with cryptocurrencies, however, is that they are not directly tied to any nation-state, government, or body – which has proved to be unsettling for many.
Profit and loss: Who stands to gain?
There is no debate as to the importance of Bitcoin in the cryptocurrency space. The prices of Bitcoin at any given time have been shown to influence the respective value of most other cryptocurrencies, too, so when its value fluctuates, so too does the worth of Ethereum, Dogecoin, and just about every other digital currency on the market.
Since the particularly erratic fluctuations in Bitcoin prices a few months ago, there have been discussions around its future, and whether it can really continue the largely upward trajectory it has enjoyed over recent years. Its volatility has proved to be both a blessing and a curse, allowing investors to easily make a quick buck but just as easily lose it. Crypto softwares such as ekrona software have helped the informed make money off volatility without emotional attachment, making the entire process simpler even for complete novices to trading – but as it stands, only the truly daring are set to profit in the long-term
Some experts say Bitcoin will fizzle out in a few months, and that the value is inflated – but the truth is that they have been saying as much for years, and so far, it has proved them wrong. Only last year, Bitcoin reached an all-time high value that was in excess of $63,000 – and every four years, during the periodic halving events, value can be expected to soar once again – so it’s fair to say that the opportunities to invest and turn a profit don’t seem to be disappearing any time soon.
Other experts say Bitcoin is set to continue heading skywards – and currently, despite its recent challenges, it looks like this might just be the case.
The next level for crypto
Over the past few months, there has been much acceptance from countries around the world in terms of making Bitcoin a legal tender – a move that has further solidified the case for Bitcoin sticking around for the long-haul.
Various central banks have had issues with regulating the use of cryptocurrencies, which has prompted countries to research and develop their own cryptocurrencies under blockchain technology. Some big firms have come up with cryptocurrencies to solve real-world problems like Facebook’s Libra – which has been hyped in some circles as the answer to various financial issues. The platform was designed to facilitate international payments and eliminate unnecessary transaction costs and fees, but as yet, it doesn’t seem to have gathered quite the pace that was expected.
The value of Bitcoin is based largely on its versatility, its ability to solve real-world problems, and its control of circulation to eliminate inflation – which in the eyes of crypto enthusiasts, is a huge plus. And, with financial experts predicting that it will hit $120,000 in value by the end of 2021 and surpass the value of the U.S Dollar in 2050, it’s little wonder that the number of investors of this ground-breaking disruptor is growing rapidly by the day.
The role of stable coins
The fluctuation of cryptocurrency has always been a sticking point in terms of its predicted long-term dominance. Can it really stand the test of time without causing widespread devastation to investors?
Coins like USDC and USDT are known to preserve their value even with market fluctuations – something that proved to be very useful in the last market crash a few months ago. Keeping this in mind, we can boldly say that there will be more stability in value for people who want to move funds from fiat (traditional money like pounds and dollars) to cryptocurrency. Not everyone is prepared to accept it just yet, but over the months that follow, the picture will become clearer.
Crypto mining: The bigger picture
Concerns have been raised about the effect of crypto mining and the environment, and this proved to be a deal-breaker for electric car giant tycoon Elon Musk, who had previously invested $8 billion into it. As more tongues wag around the subject, more crypto projects are springing up to eradicate this problem – for example, Ripple (XRP) argues that it is the most eco-friendly cryptocurrency with no mining and no proof of work required. And it is committed to being carbon neutral by 2030, which is a key selling point amongst the environmentally conscious.
Bitcoin has even become one of the top most sought-after investment opportunities for people living in countries with weak currencies. Besides purchasing local stocks and bonds, more and more are opting to invest in cryptocurrency, attracted by the bright prospects and the fact that there are no charges periodically for having them as opposed to other options provided by financial institutions.
The future of cryptocurrency is still very much in question. Proponents see endless potential, while critics see nothing but risk. Only time will tell what really lies ahead, but for now, it’s an exciting time to follow Bitcoin’s captivating story as it continues to change the face of financial investment.
Disclaimer: Investing money carries risk, do so at your own risk and we advise people to never invest more money than they can afford to lose and to seek professional advice before doing so.