The Future of Cryptocurrency. Predictions After 14 Years in CryptoMar 13, 2023
In January 2023, Bitcoin celebrated 14 years since its debut. Satoshi Nakamoto’s enterprise paved the way for a wide variety of cryptocurrencies — decentralized virtual assets secured by cryptography – and the hype and controversy persist. But now, as the crypto industry is in full bloom, it is time to revisit the future of the exciting crypto world and see what the next decade will bring.
In this article, Arctic Wallet Team shares meaningful predictions for cryptocurrency development as well as limitations to it.
4 Predictions For The Future Of Cryptocurrency
1. Worldwide Adoption of Crypto
Cryptocurrency is in its early stages and still budding, yet the most meaningful prediction for the industry is inevitable mainstream adoption. The nearing global acceptance of cryptocurrencies for investment and as a means of payment is believed to be driven by such factors as:
- Fading trust in the traditional banking system;
- Increasing barrier-free access to digital currencies;
- Growing acceptance of cryptocurrencies in retail.
According to the latest Crypto.com research data on crypto market sizing, the overall number of crypto users increased by 39% in 2022, while BTC adoption grew by 360% compared to 2021 year-end statistics. The decline in adoption rate speed is not projected.
2. Institutional Adoption
Financial institutions have been showing a great deal of interest in exploring blockchain technology and getting a share of the crypto market. As illustrated by the Decrypt research, the number of banks and investment firms offering digital asset services kept growing throughout the year 2022 despite the dramatic market downturn. The trend is predicted to hold.
Notwithstanding, a lacking regulatory framework remains the only roadblock for institutional investors stepping into cryptocurrency-related activity fully.
|Source: André Beganski via Decrypt
3. Expanding Use Cases
The rapid growth and constant metamorphosis are indicative of the crypto sphere, yet, the blockchain and DeFi possibilities are not explored to the fullest, as shown by continually emerging cryptocurrencies with novel unconventional use cases. With quantum computing and Artificial Intelligence (AI) technologies on the rise, opportunities for the cryptocurrency sector to progress are truly vast.
4. New Tech & Crypto Synthesis
Since the digital asset industry is evolving side by side with cutting-edge technologies, Artificial Intelligence and Internet of Things (IoT) practicability is expected to be tightly incorporated into the blockchain domain. To give an example, AI is already widely used to optimize cryptocurrency mining and trading. Additionally, blockchain technology merged with the Internet of Things is of enormous assistance in creating new decentralized applications.
Challenges for the Cryptocurrency Future
As possibilities for the crypto sphere to revolutionize every facet of our lives and make good progress are tremendous, so are the hurdles for its forward motion. The most concerning roadblocks are energy usage, scalability limitations, security issues, and yet undefined legal landscape for the crypto industry.
Arguably the most anticipated yet controversial transformation for the space remains a comprehensive regulatory framework. More progressive legislation on cryptocurrencies would protect users, promote greater trust, and eventually involve more investors in the space. Contrastingly, greater governmental involvement jeopardizes the decentralized nature of crypto. The question of how one strikes the balance between user security and a favorable legal framework remains open.
As for internal limitations, the capacity of the ever-expanding blockchain industry to handle growth and improve performance is of utmost importance. Ethereum and Bitcoin’s capabilities to channel speed and increase throughput via Layer-2 networks indicate progress. Still, while industry participants strive for greater scalability, the challenge of efficient electricity use remains valid.
Although the crypto sphere being a sprouting industry faces multiple challenges, the outlook for the future of cryptocurrencies is still bright. The transformative change Bitcoin and blockchain did to the world cannot be undone and the potential to grow is even more promising.
The following decades of cryptocurrencies will undoubtedly be of reconfiguration and innovative solutions. The question is not “If..,” the question is ‘When…?” the answer to which lies in how industry leaders address issues. We, as regular users, get a fascinating opportunity to observe the development of blockchain technology and join early on.