The crypto market is known for its wild volatility; even short-term predictions must be taken with a grain of salt. In this context, long-term predictions are close to futurology, but it’s possible to identify some trends that can shape this market already. After all, this niche is tied to technological innovations, and the history of cryptocurrencies is full of ground-breaking features that have driven their prices up. Learn more about them below.
Those who have been following the Bitcoin price tracker in the past few years know that it can go up and down abruptly. Price fluctuations are often unpredictable, given the speculative nature of this kind of asset, but they are, by no means, random. While some fluctuations are purely speculative indeed, others are based on pre-scheduled events or long-awaited improvements in the ecosystem.
Here are some of the long-term trends infusing hope in the hearts of investors.
Cryptocurrencies wouldn’t exist without blockchain technology. In this context, innovations on the network can drive prices up significantly, attracting more investors and thus increasing the demand for cryptos. Several companies have been working hard to improve blockchain technology to provide faster, cheaper, and safer transactions while addressing scalability issues.
Artificial intelligence has been a part of cryptocurrency transactions for a while now, tracking value, spotting new trends, and hinting at investment opportunities that can’t be seen with the naked eye. However, a new trend is emerging: AI tokens using protocols from blockchains, decentralized machine learning systems, and decentralized web platforms.
AI tokens are already used as rewards and payment methods to access data from the platforms that host them. Better still, AI-backed tokens increase the level of governance rights for crypto owners, making them more attractive to investors. The math here is pretty simple: the more people invest in it, the more valuable it gets.
The collapse of FTX, one of the biggest crypto exchanges in the world, was a shock for investors and a warning to lawmakers. The financial disaster called for increased regulation of this market, and, quite surprisingly, new regulations are by no means prohibitive. Instead, government agencies like the US Securities and Exchange Commission (SEC) are creating clearer frameworks to increase safety and transparency for users and investors.
The main point of the new regulations is to curb fraud and manipulation in this market, which, up to this point, has been far too decentralized. The SEC has put crypto giants in its crosshairs, suing those who fail to register as brokers. More recently, they have approved the trade of spot bitcoin ETFs, bringing this niche into the broader financial market instead of sidelining it. Increased transparency and safety are the key ingredients to attract more investors into this market, and government agencies worldwide will likely follow suit.
In 2022, crypto investors saw one giant fall after another but didn’t lose faith. In 2023, optimism was back, and crypto-related companies received USD 1.9 billion in investments. Last year, crypto startups amassed over USD 480 billion in venture capital funding, showing that this niche is still avid for innovation despite scare stories.
Investors have been keen on startups that promise improvements in the blockchain structure that can support its real-world applications. Most noticeably, initiatives that aim at Bitcoin mining have been reaping the juiciest returns: Riot Platforms rose by 350%, while Marathon Digital stocks increased their value by nearly 600%.
The tokenization of real-world assets (RWA) is already in full swing, but there’s always space for growth. It relies on technological improvements in blockchain structure, which is also on the rise. Nearly everything can be tokenized these days, from art to real estate, including bonds and even intellectual property.
Tokenized assets have increased liquidity, a strategic advantage for investors. Besides, it allows for fractional ownership of assets, also making them much more traceable. Other benefits include operational cost savings, cheaper infrastructure, and increased access to pools of capital for a fraction of the investment a traditional pool would require.
For a long time, cryptocurrencies have been out of the banking system, but the situation is changing. Enter the Central Bank Digital Currencies, or CBDCs, creating a centralized ecosystem for a kind of asset so far decentralized. The idea is to offer products with the same benefits as traditional cryptos, minus the risks.
It all started with the Central Bank of the Bahamas creating the Sand Dollar, a digital version of the national currency. Currently, similar solutions are being tested in more than 130 countries, corresponding to 98% of global GDP, and they’re already fully developed in Nigeria, Jamaica, and other countries
The crypto market is dynamic as it is volatile and has an unquenched thirst for innovation. Unsurprisingly, developers and startups have been working night and day to develop solutions that could bring even more investors to this niche, as the potential gains are astronomical. Despite short-term slumps, this market seems on the right track to expand its user base and real-life applications to become a global force for private investors and government institutions around the world.
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