In 2020, the field of cryptocurrency expanded at a rapid pace because of the digital transformation that was induced by the COVID-19 pandemic. It is since that particular year, cryptocurrency is witnessing major achievements and breakthroughs that are expected to shape the finance. Even though we are halfway through 2022, novel developments in the field of cryptocurrency are emerging every other day. In the next couple of months, we can expect more adoption of cryptocurrency, as well as innovative trends pushing the space of crypto.
There are a few important factors to understand about the world of cryptocurrency up front- the availability of various types of cryptocurrencies and how they are powered by multiple block chains. Even though bitcoin is one of the most renowned cryptocurrencies, there are many other types that are available in the global market. Ether remains in the second position, followed by bitcoin. The construction of ether involves a unique code that triggers purchases and sales when specific criteria are met, whereas the construction of bitcoin is very simple and it mainly acts as an alternative currency. Then come altcoins, which is a special category that consists of every other type of cryptocurrencies, including litecoin and ripple.
The majority of these cryptocurrencies are powered by the innovative technology of blockchain. It cannot be altered and help in registering every transaction smoothly. As the field of cryptocurrency has shaken off some of the skepticism around its authenticity and attracted the attention of major investors, we have dived deeper into some of the significant factors that are projected to boost its improbable growth.
5G Technology to Eliminate the Need to Place Servers Close to Crypto Exchanges
The ongoing expansion of the telecommunication sector and the rising implementation of 4G and 5G technologies across the globe are projected to foster the cryptocurrency industry in future years. 5G is nowadays extensively utilized to launch new services in the market, in DeFi applications, and for managing mining operations. The need to place servers very close to crypto exchanges is set to diminish owing to the high-speed connectivity that 5G technology would provide traders.
Stablecoins to Remain at the Forefront in the Forthcoming Years
The volume of stablecoins in circulation had surged by 500% worldwide in 2020. In the near future, dollar pegged stablecoins are likely to exhibit high demand with USDC and Tether being the leading players in the market. Stablecoins are also considered to be one of the most popular cryptocurrency in today’s digital world. As stablecoins are provide more benefits, as compared to the other types of cryptocurrencies, vendors are expected to invest huge sums in these to protect their assets from the usual volatilities that go on in the industry.
Entry of Large-scale Financial Gatekeepers to Propel the Industry
Large-scale enterprises, such as Venmo and PayPal have enabled the usage of cryptocurrency on their platforms to attract more customers. Data from PayPal showcased that those who purchased crypto on its application logged in more than they did when the company enabled such trading practice. In December 2021, for instance, the Chicago Mercantile Exchange (CME) launched Micro Ether future contracts to generate more share. Also, Coindesk mentioned that the number of users has been growing at a fast pace since the end of 2020. Increasing millennial population in various parts of the globe is likely to augment the industry.
What is the Future of the Cryptocurrency Industry?
As the cryptocurrency industry is moving at a fast pace, it can no longer remain in the shadows of social media platforms. The industry has produced parallel economies from scratch in just a span of fourteen years. At present, the decentralized infrastructure of cryptocurrencies has developed meaningful barriers against use cases present in the real world. Therefore, cryptocurrencies are still considered to be highly volatile, heavily concentrated, and brand new investable security. We expect that integration of cryptocurrencies with existing systems across numerous sectors, as well as financial services is anticipated to evaluate the future adoption rates in this industry. If it showcases a positive sign, investors are likely to gain new opportunities at a rate that would complement potential risks.