You may already be using it or you may still refuse to trust it at all, but you can’t deny that cryptocurrencies are the thing now and their popularity is only growing. A lot of people were predicting the downfall of cryptocurrencies after the 2018 clash, but they were all wrong – the crypto market seems to be heading in the right direction, and it looks like it’s much more stable these days, or at least it’s on the right path to becoming stable and trustworthy.
Cryptocurrencies are developing fast, with bitcoin leading the way; you can buy it, you can buy with it, or even invest in it or with it (read the Trading 212 review to see some trading opportunities). The market has already proved to be unpredictable, so it’s extremely hard to tell its future, but there are some trends and predictions that are shared by the majority of experts.
The Halving and what it means for the market
The bitcoin halving in May 2020 is one of the most anticipated events right now. What does it mean? Exactly how it sounds – bitcoin will reduce the number of coins rewarded for mining by half because it gets close to full saturation and otherwise there won’t be any bitcoins to mine. And it doesn’t look like Satoshi Nakamoto is going to create any more in the near future. While it may sound dramatic and catastrophic for the users, it has actually already happened (twice) and it didn’t bring great losses. In 2012, around the first halving, the price of bitcoin went from $10 to more than $100, while in 2016 from $400 to more than $800 by the end of the year – the fewer the coins, the more expensive they become. There will be a lot of speculation and volatility in the bitcoin market, so traders need to stay cautious and attentive. That’s why many of them have already started preparations as it’s impossible to say if the scarcity of bitcoin alone will constitute its value, or maybe it will lose value to, for example, Bitcoin Cash.
Will the altcoin crisis go on?
Though bitcoin is the prime cryptocurrency on the market these days, there are thousands of other coins appearing and disappearing; right now, mostly disappearing. The majority of these coins have no real value, no liquidity, therefore, there’s no demand for them. You don’t have to be an expert to guess that they will probably keep disappearing.
As for bigger coins other than bitcoin, there are several things to watch.
XRP, the coin used by the Ripple company, is apparently used by dozens of their clients for cross-border transactions, but if it has been created to convert currencies during transactions, its price doesn’t really matter, so it’s not an investment asset, and the demand is not yet high.
There are enormous changes coming for Ethereum. They are preparing an update so large that it’s already being called Ethereum 2.0; it’s estimated to last the whole year so the price of Ether will certainly be fluctuating. Experts are also wondering what will be its impact on the decentralized application market. It’s already predicted to increase the scalability of the network and influence the future of the main blockchain platform.
When it comes to Tether or other native exchange tokens, the spot market is still growing, it has become more regulated and safe, and it’s determined only by its traders.
Fintech and the future with universal digital currency
Right now, everybody’s waiting for the digital yuan. The Chinese government is introducing many technological innovations to make people ready to switch to digital money, and it will certainly be only the beginning of the global transformation. It has been already said that central banks should start developing their own cryptocurrencies, and so we have now Central Bank Digital Currency (CBDC) with possibly more to follow. It’s a huge recognition of the importance of cryptocurrencies. All banks are also discussing the possibility of introducing one universal digital currency.
Apart from that, Facebook has announced to launch its own cryptocurrency called Libra somewhen in 2020 which will surely be a huge event considering the omnipresence of Facebook and the number of its users, many of whom have never used any cryptocurrency before.
Many experts claim that it will be the beginning of the transformation of the way we see and use cryptocurrencies. A lot of fintech companies are already working on ideas to implement cryptocurrencies to our everyday lives.
The future is not yet here but it’s coming
A lot of people say that 2020 will be the deciding year when it comes to the future of cryptocurrencies. This is the moment for the coins to prove their value and usability, and, who knows, maybe in the future, we will all be using digital money to pay for Uber, bills or groceries.