In 2020, we witnessed the rise of the cryptocurrency market. In 2021, the price of cryptocurrency will continue to rise, and more and more people will adopt cryptocurrency. This popular trend continues to affect the traditional economy.
It is undeniable that this fashion trend has severely accelerated the world’s full entry into the digital age. From ordering food to buying art, people are becoming more and more accustomed to using smartphones or laptops. So from now on, what do you think cryptocurrency will look like in the next five years?
Here, three noteworthy aspects are proposed. Regarding the future of encryption, we should focus on the following aspects.
As cryptocurrencies continue to enter the financial market, policymakers and central banks are busy formulating regulations to ensure the security, reliability, and control of energy use of digital currencies. Although cryptocurrency itself has no boundaries, news of regulatory actions still strongly impacts the cryptocurrency market. As a result, regulatory negotiations are heating up, and the more tokens on the market grow, the more regulators will scrutinize them.
This is not necessarily a bad thing for stable coins. On the contrary, once the supervision is completed, we will hope to witness the further large-scale migration of compliant, stable coins into traditional finance, which will provide the impetus for the next round of growth of DeFi.
Yes, you heard it right. Investment companies like Fidelity are working hard to get the U.S. Securities and Exchange Commission’s approval for cryptocurrency ETFs. These funds can help investors diversify their investments in different tokens and can use users’ traditional investment accounts. In addition, these ETFs will open their doors to investors who are not as tech-savvy as millennials but still want to understand them.
Although the possibility of approval is high, the violent volatility of Bitcoin prices in the first few months of 2021 has once again raised concerns about the risk of such volatility for ETF investors.
Remember that the traditional way of owning cryptocurrency (investing in crypto ETFs) is not as safe as investing in the stock market. These ETF funds are still as speculative as any crypto investment and are susceptible to high volatility.
Wider Institutions Adopt Cryptocurrency
Just last week, payment giant PayPal announced that it would allow its customers in the UK to buy and sell artificial currency, causing an uproar. In addition, some large companies such as Microsoft and Tesla have begun to accept Bitcoin as a payment tool. These are all essential steps towards the large-scale adoption of digital currencies.
Large companies are now the leaders, giving more and more companies confidence in adopting cryptocurrencies. They are convinced that digital currencies will play an essential role in the long-term trend of consumer payment.
Because of this, the prosperity of the entire crypto market has created an unprecedented financial revolution. Although they still have many obstacles to overcome before encryption technology can enter the mainstream market, the situation looks pretty good and exciting. As blockchain technology provides good benefits such as anonymity and low transaction fees, the growth and adoption of the cryptocurrency market are inevitable.