This article will explore in detail, the future of cryptocurrencies and how the prices fluctuate concerning government laws and policies. The reader will also learn about the various other types of cryptocurrencies that have been going around in the market and have a similar potential for growth as bitcoin.
Thanks to the $1.5 billion investment by Tesla, bitcoin is at an all-time high. The price levels have reached over $57,528 at the time of this writing. But what is bitcoin or cryptocurrency, for that matter, and why are the prices rising? When we use advanced encryption techniques, cryptography and decentralisation to manage and create a digital currency, it is known as cryptocurrency. In short, bitcoin is a virtual currency, which has all the powers and functions of currency, transaction processing and issuance. What’s more? All of this is carried out by the network itself.
Bitcoin changed the game of investing when it suddenly surged over ten folds during 2013, attracting a lot of attention from institutional investors. Subsequently, it crashed by 50% overnight and started a fiery debate about whether it can be successful in investing. The only thing that deters people from dealing with this currency is its inherent complexity as compared to the traditional form of currency.
Only the people who are adept with technology and can optimally understand the working of the cryptocurrencies are mostly willing to invest in it, while it is overlooked by many others. The complexity of understanding how it works must be reduced to facilitate increased participation while ensuring that proper steps are being taken to safeguard the interests of the masses. The future of cryptocurrency predictions is something that everyone has an eye on, as identifying this, cryptocurrency’s future will help investors make a wise choice.
Unocoin is currently India’s most trusted crypto exchange, with over 1.5 million users. They provide the most attractive fees in the market, with variable fees for higher volume trading and a variety of digital assets for the users to trade with. The platform is highly secure, user friendly and very intuitive.
What is the future of cryptocurrency?
Kenneth Rogoff, a professor from Harvard University, had suggested due to the sentimentalism of the “crypto-evangelist”, the market capitalization of cryptocurrency might explode shortly. But he had suggested that the value of each unit will be around $100 and not around $100,000, as some might expect. As of 2021, the price of a bitcoin has surged over $50,000. It is expected that the market capitalization of this currency could be over $5 trillion shortly.
While some suggest that the future of cryptocurrency is a gold mine, others indicate that it is a bubble that might burst at any moment. Due to the transactional nature of the currency, it is more vulnerable. Also, the cryptocurrency market is vastly unregulated. That is why many people can still not understand its full potential.
While the number of traders who accept bitcoin as payment has been increasing steadily over the past couple of years, it is still a small number. Even though these cryptocurrencies can be bought and saved in high-security wallets, they are still vulnerable to hackers and other malware. Even a simple hardware malfunction could erase someone’s wealth.
The future of cryptocurrency is uncertain. Simple retail investors could never know about how the government is planning to regulate it. While some countries are treating bitcoin as “property”, others are treating them as a “commodity”.
The government should move towards the future, where cryptocurrencies are regulated and accounted for. They are innovative ways of raising funds for the public, which can help boost commercial activity in the nation.
How no government regulation impacts the future of cryptocurrency?
The future of cryptocurrency currently seems rosy because it is not strictly regulated by the government. Each time the prices reach a new high, government intervention brings down the prices. Since it is fundamentally a peer-to-peer network-controlled system of currency, it can only flourish without any harsh regulations.
Generally, no government intervention puts the general public who is buying the bitcoin, at risk. While in a technically regulated market, dumping of stocks or other securities can be a punishable offence, dumping bitcoin is not, as they have not been categorized. In 2019, when bitcoin peaked at around $13,000, there was massive dumping of the shares in the market to bring down the price significantly. Only a regulatory body has the power and the resources to counteract this.
The future of cryptocurrency in India is entirely dependent on how fast the country can react to changing volatility of the financial world. Most nations have started building a Central Bank Digital Currency (CBDC) structure. CBDC can be issued and controlled by the Central bank like RBI. It will also be trustworthy, and traders will be encouraged to buy/sell this since this will be backed by the Central Bank.
What is the impact of increased scrutiny on bitcoin?
The volatility of bitcoin has always been the cause of the questionable future of cryptocurrencies. Economists have always been left bemused by the rapid change in the prices of bitcoin and other cryptocurrencies. Since there are no fundamental or other technical factors that can account for these rapid changes in the price, one of the major factors that can be considered by the traders is government regulations.
Some notable investment banks have suggested that government acceptance of this new form of commodity is essential to accelerate the prices of bitcoin further up. There a few ways in which increased scrutiny by the government regulatory bodies can control the prices of the commodity-
- They can regulate the price of the asset and break the trading circuits to prevent wealth errorsion during volatility times to prevent overinflation of the prices.
- They can also curb the rising prices due to the enthusiasm of the traders and the investors, reducing the cost of doing the business.
- Lastly, tax commodity and impose stricter regulations and can regulate the prices by making them scarce.
However, the chances of all these methods succeeding are pretty low due to the decentralized nature of the cryptocurrency. Bitcoin is extra-national, which means that the ledger accounts handling these are spread across multiple nations.
On the other hand, banning the entire band of cryptocurrencies by the government shows their inability to understand and accept the new way of trading and exchange that can be beneficial for the masses. After all this, the effect of the regulations on bitcoin is very limited. Also, not regulating it would make it difficult for the government to charge taxes on the gains one makes by buying and selling cryptocurrencies. The government should also educate the budding investors and make them aware of the risks that come along with trading with cryptocurrencies.
What is the future of Litecoin, Ripple?
Made and owned by the Litecoin Foundation, which was founded by a former Google employee, Litecoin has been gaining traction. Litecoin was the future of cryptocurrency for 2021 and followed the trend of bitcoin and increased beside it. In 2022, it is expected to do the same. Since they both work on the same principle, the price rises concurrently with bitcoin prices.
Ripple, officially known as XRP, was found to disrupt the industry and provide one of the lowest transfer fees of any cryp
tocurrency assets. Ripple targets customers that aim to transfer huge amounts of money across the nation with minimal fees. XRP aims to become the new industry standard and replace the existing procedure of SWIFT, which has a slower speed and higher charges.
XRP seems to have the highest potential among its competitors as it is considered a new industry standard in many nations.
Unocoin is India’s first and the most secure bitcoin trading app. This exchange app was founded in 2013. You can buy and sell bitcoin instantly using the Instant Buy and Sell feature. Not just this, you can also buy ETH and Sell ETH in no time. With more than eighty-seven coins listed on this best cryptocurrency exchange in India, you can also accept bitcoin from your friends from any location. You can also know which cryptocurrency works best for you with the price ticker and notifications. The most popular cryptocurrencies like Bitcoin (BTC), Ether (ETH), USDT (Tether), BNB, Ripple (XRP), Cardano (ADA), Solana (SOL), Binance USD (BUSD), Dogecoin (DOGE), Polkadot (DOT) and other popular altcoins can be traded on the go. The new Android and iOS applications make Unocoin the best cryptocurrency app. With the unique feature of the Systematic Buying Plan, you can buy and sell bitcoin and Ether periodically. What more? You can start your crypto journey using SBP for as little as INR 10. With another exciting feature called Crypto Basket, you can diversify your crypto portfolio based on market capitalisation (Market Cap) or Volume. These two excellent features make Unocoin the best cryptocurrency platform.
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Crypto products are unregulated as of this date in India. They could be highly volatile. At Unocoin, we understand that there is a need to protect consumer interests as this form of trading and investment has risks that consumers may not be aware of. To ensure that consumers who deal in crypto products are not misled, they are advised to DYOR (Do Your Own Research).