Future of crypto currency

With a volatile trading market starting in 2023, cryptocurrency traders are surely encountering a rough span of time. Despite the gloomy development over the past few months in the sector, many financial leaders have come in support of crypto currency to be the best financial tool of the next generation and for the growing digital markets.

Larry Fin, BlackRock’s Chief Executive said in one of his interviews that ‘I believe the next generation for the markets, the next generation for securities, will be tokenization of securities’

Even with an overall increase in the volatility of the crypto market, investors continue to believe in the future of the digital currency.

What is Crypto?

It’s simply a digital token of currency – which guarantees ownership. It is recorded on a blockchain that offers a sure shot security. Bitcoin and Ethereum are two of the most common and world known cryptocurrencies along with dogecoin that are traded multiple times daily. Tech mogul Elon Musk is known to be a huge supporter of crypto currency and has been seen to endorse the future for them many times leading to rise of the Dogecoin prices.

While the overall crypto sector still has a lack of regulations – crypto is the new financial frontier everyone is eager to be the leader in. With US president Joe Biden expressing his desire to explore a US digital dollar to the Super Bowl – all ads to the growing desire of the digital token where powerful governments to leading multi-millionaire and billionaire corporates are bringing up the cause to help legitimize crypto – same as stocks and bonds.

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Risks of investing in Crypto

In the words of Gerri Wash – the senior Vice President of Investor Education at the Financial Industry Regulatory Authority ‘Cryptocurrency is one of those categories of investing that does not have those traditional investor protections and they are outside the realm of securities trading. It is an area that’s in the flux, as far as regulations go.’

This itself offers us a good insight into the risk involved with crypto and how we must act with caution before investing. If you are thinking to add crypto into your investment portfolio, here are some risks you must consider:

A. Market volatility

Crypto is not governed under the present investment and securities law – hence it is a digital token which offers almost no protection to its investors. It is a virtual currency that is known to be volatile and driven mostly by hype. As we have seen with dogecoin promoted by Elon Musk lately. Social media channels can easily drive one crypto currency up today and another into the ground by tomorrow.

B. Investment scams

Digital token often finds itself in news for crypto scams. A lot of people often push investors to pump and dump – which is to invest in a crypto for a certain period and wait for it to rise – often scammers take advantage of this by encouraging more people to invest – building a market scenario for its value to rise. When it does – the scammers often are found to sell out their share of it – pushing the price down for everyone else and helping themselves to gain quick access to cheap crypto.

C. Government protection/ Investor protection

In traditional investments – there are laws and regulations in place. With regulatory bodies making sure investors rights are always protected and scammers get punished based on their crimes. With crypto – there are no set rules or regulatory bodies that have defined laws. Crypto deposits are not offered protection by many governments world-wide.

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Even with these risks at hand, the global audience is becoming more aware of how investment in crypto can be beneficial for a future that is led by emerging technologies where blockchain will be the leader. Many financial experts and global finance heads have taken into consideration the future prediction and offered insights into what the future of cryptocurrency will bring to us. Here are the trends to lookout for in the crypto sector:

Regulations in crypto

For years there has been talk to regulate the crypto market – for now the market is completely running on hype and the valuations are skyrocketing one day to plunging the other with no security to the investors. Many experts have a belief that 2023-25 may be the year when many powerful government setups will finally consider the larger benefits of crypto and bring in regulatory authorities that will impact and change the industry for good.

Volatility – profits and losses

The current market for trading is proven to be extremely volatile. With the world in its transition phase on multiple tangents including a massive shift towards Web 3.0, 5G and Metaverse – crypto has been the centre of all these conversations. With the current market – investors may see a slow growth or a halting growth in the crypto market which experts mention they only see a rise in the next couple of years. There is no guarantee that every crypto coin will rise – until there is a global social media conversation that leads to hype for one.

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Public adoption

The rise in mobile applications offering investment and trading education – especially related to crypto – and its mass marketing is one of the key reasons that there is growing public adoption for investment in crypto. Global population is becoming aware of the long-term outlook of crypto and its mass public adoption is likely to continue in 2023-24.

People are getting more comfortable with crypto investment despite their risks involved being high – all offering the digital token/ virtual currency a strong and solid future course.

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NFTs recover and grow

NFTs have been a success in the arts and fashion world with the overall gaming and entertainment sector now taking their own share of the tokens. This small yet most talked about part of the crypto sector is thought of by experts to bounce back in 2023 with news that many leading brands like Disney are coming with their own investments in NFTs. Leading brands like Nike, Adidas and Gucci have already taken steps to build unique limited-edition products to focus on the NFT market – all seeking to continue in the same direction.

These are taken as strong hints by the market of a growing crypto sector.

Survival and growth

2023 is expected to be the big year of crypto survival with slow and stagnated growth – while 2024 and onwards are seen as the years with huge gains and return to those who risked their investments. While 2023 is claimed by some to be the regrouping year for crypto, it is on standby to be pushed into heavy returns by 2024.

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