What Do We Know about the Future of Cryptocurrency?

February 25, 2023

The crypto market experienced a downturn in 2022, as Ethereum and Bitcoin were down more than 50% from their highs in 2021. This market is stalled now though there have been certain surges recently. 

Experts have different views about the future of cryptocurrency. Some of them say it will recover, while others aren’t so optimistic. In this article, we are going to talk about the potential future of cryptocurrency as this market is constantly evolving, and the relevance of the crypto topic will only increase because people are no longer interested in such things as “is 680 a good credit score”, they want real technological curiosities. So read and enjoy!

Future of Cryptocurrency

The previous year brought an increase in Bitcoin and Ethereum, but then these cryptocurrencies crashed in June 2022. The Biden administration and U.S. government officials have expressed interest in new laws for cryptocurrency. 

The interest of people in the crypto market is also rather high. It is a hot topic, and many investors are considering the option of trading cryptocurrencies and adding them to their portfolios.

Some experts claim that cryptocurrencies are rather speculative investments. There are some benefits to investing in them, but certain risks exist as well. In any case, this industry is constantly developing and evolving as it’s just in its infancy. What is the future of cryptocurrency? Here is what may happen in the near future.

A recent survey published by the Pew Research Center states that 43 percent of men aged 18 to 29 have traded, invested in, or utilized a cryptocurrency. Women are less interested in cryptocurrency, and only 19 percent of them aged 18 to 29 have used, invested in, or traded cryptocurrency. Generally, 16 percent of Americans claim they have ever utilized cryptocurrency.

Predictions for the Future of Cryptocurrency

  • Clashes over-regulation. The battles over cryptocurrency regulation are quite possible in 2023. They will most likely reach a climax next year. Harsh regulation of cryptocurrency will be proposed while people will try to fight against proposals that threaten its decentralization.

  • Global adoption of Bitcoin. More and more leaders and business owners worldwide use or trade Bitcoin. It is amazing how many entrepreneurs will start investing in this cryptocurrency in the coming year.

  • Web3 platforms keep on growing. It is another prediction for cryptocurrency. Experts claim there will be more significant Web3 social platforms in 2023 and the development of on-chain social graphs.

  • The development of NFTs. This year’s growth of NFT funding became a major indicator that it will be one of the most important sectors to develop and recover in 2023. Brands and companies will keep on flocking to NFTs.

  • DAOs and gaming continue to grow. Famous Web3 game titles such as Ember Sword, Star Atlas, and Big Time will keep on developing next year. Decentralized autonomous organizations have been on pause this year but will also witness growth next year.

What New Regulation Means for Investors

The regulation of cryptocurrency is a hot topic. Yet, many specialists claim this is a good thing for the industry in general and investors in particular. One of the obvious drawbacks of cryptocurrency is that it has high volatility. More cryptocurrency regulation may bring additional stability into this market and be helpful. 

Besides, long-term investors will get more protection, and fraudulent activity will be prevented. There will be clear guidance as well. Experts believe that some regulations will be beneficial for everyone. It will generally bring more confidence to consumers in the crypto market. 

The price of cryptocurrencies will be affected by regulation too. Professionals advise investors to keep their cryptocurrency investments to less than 5% of their overall portfolio because of industry volatility. Don’t invest what you aren’t ready to lose.

Is Cryptocurrency a Good Investment?

Many investors are willing to know if cryptocurrency is actually a good investment. There is a lot of hype around cryptocurrencies today, and trillions of dollars are already invested in this market. 

Yet, there are some speculations about this topic. Some investors lose a lot of money in scams like TerraUSD stablecoin or Squid Game token. But there is still a question on whether they should invest in cryptocurrency today.

There are many stories about losing or making crypto millions overnight, even though this market is rather volatile. Consider asset allocation in the first place. It means spreading the investments across different instruments to have diversified returns. 

It will protect your investment portfolio in the long run and prevent major losses. Cryptocurrency should be considered the same way. The time frame, financial targets, and risk tolerance are what you should take into account if you are a potential investor.

What percentage of your investment portfolio are you ready to allocate to cryptocurrency? Do some research on the market before you decide. Don’t just listen to other investors’ or friends’ positive stories. 

To better understand the technology and purpose of cryptocurrency, you should check the white paper first. Besides, you should avoid crypto asset collapse because of fraudulent activity, as there is a lack of regulation.

The second question is about the way you would like to invest. When you select a cryptocurrency you feel comfortable trading, think about the way you want to do it. Do you prefer to invest via Exchange Traded Funds? Do you want to hire an asset manager? Would you like to buy cryptocurrency directly? If you select this option, consider the account you will use to hold your investment.

Will you hold the crypto asset yourself or use the account at the crypto exchange? Finally, you will need to select between buying the stocks of crypto exchanges and investing by proxy. There are advantages and drawbacks to each of these investments, so it’s essential to review them before you make your choice.

The Bottom Line

Specialists speculate on what future cryptocurrency will have. There are some predictions for cryptocurrency for the coming year. The reality is that the crypto industry is still a speculative investment, so it’s hard to predict what will happen in the future. Consider the pros and cons of cryptocurrency before you decide to invest in it, as there are some risks involved.