The cryptocurrency market is one of growth, innovation, and cutting-edge technology but it is also one filled with uncertainty.
While certain crypto evangelists see no problem with the emerging technology, plenty of traditional financial market operatives do.
Though these concerns probably won’t be enough to stop the rise of cryptocurrencies as an alternative payment system, they will be shaping the way we interact with it and use this electronic money in the future.
We’ve identified ten major trends that are impacting the future development of cryptocurrency.
From shaping consumer perception and changing their habits to government recognition and regulation of the tech, here are ten things that we think are going to shape the future of cryptocurrency moving forward:
- Growth in Coin Offerings
This probably won’t come as a shock to anyone observing the crypto market, but experts anticipate that the number of new coin offerings will continue to rise until plateauing as the market becomes more established. But, even then, the opportunities for disruption are much greater than in traditional payments systems. In other words, cryptocurrencies might rise and fall based upon not only their value but also their perceived utility to consumers making them very different than current payments systems.
- More Integration with Payments Systems
One of the biggest complaints the average consumer has about cryptocurrency is that they cannot pay their bills with it. This will change as more and more systems integrate crypto as a payment option. Where this market penetration occurs, however, is another matter of speculation but, in general, experts believe that once crypto is used to pay for things like water, heating, and electrical bills then the market is firmly on its way to becoming an alternative to things like credit and debit cards.
- Investment Opportunities
We don’t just mean in new coin offerings but also in new, innovative financial products based upon crypto. While the initial wave of Bitcoin millionaires might have done a lot to capture the imagination of the general public, the second wave of opportunities brought about by more sophisticated investment vehicles will be unlike anything seen before.
- Market Consolidation
A few key players will start emerging in the crypto space and this will help catapult its growth beyond the somewhat niche status it currently enjoys. Whether consolidation in the form of consumer sentiment buoying one crypto over all the rest or consolidation in companies that handle crypto services, the increased scale of operations of the crypto economy will make it easier and cheaper for consumers to participate.
- Government Integration of Blockchain Technology
One of the surest signs as to what the future might hold for cryptocurrencies is how governments grapple with their rise. As soon as governments start to embrace and even regulate cryptocurrency, you will know it has come of age. This is probably the single biggest trend facing cryptocurrency companies moving forward: How to deal with encroaching government regulation without letting it impact the disruptive, innovative nature of the product.
- Fintech Disruption
From new products and services to entirely new companies, the financial sector will continue to experience disruption at the hands of cryptocurrencies. It isn’t certain whether crypto will become a permanent alternative to fiat currency, but its ability to prompt change and reconsideration in the financial industry is one that is expected to stick with it throughout.
- Trading Crypto on Major Markets
We’re already starting to see this occur in a big way but we’re talking about mom-and-pop retail investments here. Think IRAs, 401ks, and even college trusts. Breaking into this more staid market is the next hurdle for crypto to overcome and it is one around which many new products and services will emerge. From catering to those millennials skeptical of the stock market to offering new investors a way of getting in on the action, the expansion of trade in crypto has many outlier effects for ancillary industries attach to it.
- 8. New Transaction Speeds
The speed with which transactions can be settled in cryptocurrency makes it enviable from the standpoint of providing the consumer yet another choice. From speeding up payments settlements to making funds more readily available to consumers, crypto is placing the burden on banks and other financial institutions to step up their game when it comes to the delivery of funds to their clients.
- New Business Models Will Emerge
As cryptocurrency begins to become more widespread and common among consumers, new business models that cater to it and are shaped by it will start to emerge in the market. From sending payments overseas to financial institutions premised on privacy as a premium, crypto will enable consumers to have a greater degree of freedom than they have ever experienced before. The problem is getting consumers and businesses to adopt this as a new way of doing business but, once that is accomplished, the rest will flow naturally.
- 10. Increased Regulations
Government scrutiny and regulation of cryptocurrency might seem like a far-fetched idea but it is more real than many enthusiasts like to admit. This is probably the biggest thing that could impact cryptocurrency from an acceptance and development standpoint. If governments around the world decide to come down hard on crypto or regulate it in a way that eliminates many of its advantages, then cryptocurrencies might struggle to gain wider acceptance in society. Innovation and disruption are two things, but going against governments is a third rail that many trends, no matter how powerful, are unable to overcome.
But, until governments accept it on some level, crypto will remain an outlier and an exotic investment. Its utility as a method of payment or as a new system of settling payments is undermined entirely by the fact that no one will be able to use it for that. Keeping crypto as a vehicle for financial speculation might make traders rich, but it doesn’t further the implied goals of the entire movement. Grappling with regulation and adapting to it will become the story of cryptocurrency in the coming years.