After an eventful 2022, cryptocurrency’s long-term future is beginning to take shape. A series of overarching themes will steer the industry’s course; these include regulatory frameworks, mass market adoption, ETFs and Stablecoins.
Brands can help address the industry’s volatile and loosely-regulated nature by offering trades in an environment conducive to beginners while offering content that’s simple for intenders to understand.
Regulatory frameworks
Regulated frameworks play a pivotal role in shaping the future of cryptocurrency. By setting minimum standards for crypto businesses, regulatory frameworks help protect investors and reduce fraudulent activities, helping reduce stigma surrounding digital assets while encouraging mainstream adoption of this form of investment. Furthermore, financial institutions may find opportunities within this space to invest.
While regulation may slow innovation, it’s necessary to protect consumer safety and maintain market integrity. Regulators should implement disclosure standards, investor education initiatives and antifraud measures in order to increase trust within the industry.
Regulation developments can have a major influence on the future of cryptocurrency, so the best way to navigate its unique environment is through education about risks and rewards involved. With informed decision-making, crypto could change our global financial system while creating job opportunities for finance professionals who specialize in cryptocurrency or blockchain technology.
Smart contracts
Smart contracts are an innovative way of automating blockchain transactions using logic statements such as “if/then”, functions, module imports and other programming techniques to trigger actions on behalf of both parties involved. They’re usually written in languages designed specifically for this use – like Solidity – making their implementation seamless.
Smart contract technology serves multiple functions. They can help regulate blockchain transactions with digital assets like non-fungible tokens (NFTs). Furthermore, smart contract technology is also utilized in real estate and trade finance transactions and automate escrow accounts and facilitate cross-border payments.
Smart contracts provide an alternative to intermediaries who add time delays and fees while also helping reduce paperwork and compliance costs. Furthermore, they allow participants to store transaction details securely on the blockchain network which makes it nearly impossible for hackers to alter records that use encryption and thus making this method of conducting online business secure and independent.
ETFs
If you want to invest in cryptocurrency but prefer not to own the physical assets themselves or be concerned with security issues at exchanges and wallets, an Exchange Traded Fund (ETF) might be the perfect way to do it. These funds invest in various cryptos as well as the technology behind them – providing a diversified way to speculate on its future growth.
An ETF that provides exposure to Bitcoin would enable large institutional investors to gain exposure without directly owning it, which could play an integral role in legitimizing Bitcoin as an asset class.
ETFs don’t come without risks. Investors in these funds are exposed to the market volatility and will likely face higher fees than with direct investing in crypto assets themselves. Furthermore, these ETFs won’t offer the same security features of private key-based cryptocurrency wallets, and rely on third-party custody services which may be vulnerable to hacking and theft.
Blockchain technology
Blockchain technology represents the fifth disruptive computing paradigm following mainframes, PCs, the Internet and mobile/social networking technologies (20). Utilizing distributed ledgers to track transactions and establish trust, Blockchain provides a tamper-evident, immutable record of trades which businesses can rely on. Every block in its chain is linked together making any tampering impossible while its key strength lies in being connected by multiple linkages to previous blocks preventing any attempts at altering the record.
Blockchain applications are helping companies monitor supply chains, track items in transit and perform quality control more easily than ever. Individuals also utilize this technology for data storage and sharing while maintaining control of their digital identities. Yet despite all of the hype and billions invested, some worry that cryptocurrency has reached the peak of overinflated expectations. Just in 2022 alone, $2 trillion of speculative market value disappeared overnight! Whether cryptocurrencies will ever become part of mainstream economic systems remains to be seen – however their supporters maintain they could create an asset class providing returns beyond traditional investments such as stocks & bonds.
