It is never wise to make predictions about the future, particularly not in finance. And when it comes to crypto-finance, it is especially hard to predict what will happen in the future — let alone today. This is not stopping anyone from making predictions, however. Quite a few writers have speculated on what the future of cryptocurrency will look like. Whilst it is impossible to pinpoint exact changes, some trends are more or less certain to continue. More investors will begin to buy into cryptocurrency, security and regulation will improve, and the market will probably remain volatile for the foreseeable future.
More funding from traditional investment sources
As cryptocurrency becomes more mainstream and governments are implementing proper regulations, investors who have been apprehensive will begin to fund blockchain projects. When the space becomes regulated, there will be less anxiety and fear about bad investment decisions. This will open up the doors for the more cautious investors. Because cryptocurrencies like Bitcoin and Ethereum have been in circulation for quite a while now, more people are beginning to view it as a serious financial investment. Although Bitcoin has taken a huge hit in terms of value since the crash last year, experts are predicting that it will actually rise higher than the all-time high of $20,000. Some have even speculated that the value of a Bitcoin will reach a quarter million dollars by 2022. There is still a long way to go before everyone is onboard the crypto-train, however.
Security and regulation will improve
One of the biggest concerns cited by apprehensive investors is the lack of security in the cryptocurrency space. A recent survey revealed that almost half of the respondents saw security in cryptocurrency as a big concern. Part of the problem is the lack of regulation of the market. Although more and more countries are slowly implementing proper regulations, the market as a whole remains largely unregulated. Compared to trading with fiat money, the cryptocurrency space is considered to be the Wild West. Hackers and scammers thrive when there is little to no regulation, which is also off-putting for investors. Fortunately, many countries are in talks of rolling out global regulations, which should remedy these concerns. The recent G20 meeting in Argentina saw proposals for cryptocurrency regulations being laid out for the future.
Volatility will continue
One of the main factors that worry investors is the volatility of the cryptocurrency market. Although this can mainly be put down to the temperament of the current traders, security is also a concern.
The recent hacking of Coinrail, and subsequent dip in the value of Bitcoin and Ethereum, is a good example of how a lack of security can impact the market as a whole. But trader temperament and security concerns are far from the only factors that make the market so volatile. The lack of intrinsic value of cryptocurrency is another major reason why the value can rise and fall so much and so fast. Although Stablecoins have physical goods like gold to back them up, these tokens are the exception rather than the rule. This indicates that, unless something changes, cryptocurrencies will continue to be volatile in the near future.