In recent years, cryptocurrencies have been gradually taking over the world. The major causes for the increased use of cryptocurrencies are growing money laundering scams, distrust in centralized financial systems, and enhanced competition in the banking sector. Besides, this DeFi wave received a boost during the covid outbreak. More usage of technology and digitization led to rising awareness of cryptocurrencies and utilization of related infrastructure, such as crypto wallets.
Yet some questions still loom over the minds of the general public and prospective crypto investors. In the near future, will the value of cryptocurrency bitcoin soar or fall? Will crypto wallets be regulated? Will more people invest in cryptocurrency? And many more..
Here, we review the main predictions and trends that are expected to follow in the next five years and so.
Top Projections for Cryptocurrency Sector
If we look at the near past, the year 2021 proved favorable for cryptocurrency, and since then, its appeal remains strong. Since the beginning of 2021, the value of digital currency increased by almost 70%, propelling the total market value of cryptocurrencies above $2 trillion.
(Source: CNBC)
However, cryptocurrency traders had a difficult time by the end of the year 2022. This was largely due to worldwide scams and legal uncertainty.
Yet, despite these gloomy events, financial analysts strongly believe that cryptocurrency will usher in the next phase of industry expansion. Despite the significant trade volatility, experts believe that cryptocurrencies will rebound with greater force in 2023 and prosper in the upcoming years.
Here are the key crypto trends to look out for
1. Mass Adoption of Crypto wallets
To begin with, the only purpose of wallets was to serve as a vault to hold cryptocurrency. Yet today, some of the wallets have their native tokens, which are also given as rewards in giveaways and similar other contests. Online crypto wallets can act as potent contributors to the decentralized web (Web3) once they advance beyond being a storage safe to hold financial assets. Some of the latest digital crypto wallets have opened secure and common portals into the fascinating world of DApps and other Web3 apps.
On one hand, the worldwide popularity of cryptocurrencies is driven by increased internet usage, while on the other, more and more users are turning to crypto wallet apps with enhanced smartphone usage. Users are increasingly using these wallets, because of their convenience and easy accessibility for storing, receiving, and sending crypto assets.
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APP STOREThe strong security offered by cryptocurrency wallets is anticipated to spur demand, furthering the market expansion. The number of people using crypto wallets increased to 84.02 million in August 2022, from 76.32 million in August 2021. The rising acceptance of cryptocurrencies can be ascribed to the growth of crypto wallets’ usage. By 2030, the market for crypto wallets is expected to reach USD 48.27 billion.
(Source: Grand View Research)
2. Worldwide Regulation and Legislation
Before 2022, the blockchain and cryptocurrency industries continued to face a huge challenge regarding a lack of regulatory guidelines. The development of legislation and rules around cryptocurrency got its kickstart in 2022. Giant economies like the US, EU, Canada, the UK, Australia, and Japan are spearheading defined crypto regulations and related laws.
Besides, some of these nations also allow merchant commerce using cryptocurrencies. Meanwhile, countries like India are in the process to set similar legislation.
3. Increased Investments in Crypto Assets
With the creation of user-friendly wallets to secure and transact crypto assets, there is going to be a definite rise in the number of crypto users worldwide. Moreover, the regulations and related clarity predicted in the next few years will encourage people to invest in cryptocurrencies and NFTs.
About 500 million people will hold Bitcoin as a key cryptocurrency by the end of 2023, according to Ric Edelman, the founder of the Digital Assets Council. (Source: The News & Observer)
Even if the crypto sector expands at the slowest possible rate, it might reach as many as 1.2 billion people by 2025.
(Source: CryptoSlate)
4. DAO and DeFi emerging as the biggest growth areas
Decentralized autonomous organizations (DAOs) and Decentralized finance (DeFi) are two fastest-growing areas of cryptocurrency, that are likely to take a huge leap in the next few years. With DAOs as a new internet community and DeFi as the middlemen-free financial landscape, the use of cryptocurrency is expected to be propelled to greater heights.
It is worth noting that in 2021, deposits into DeFi services crossed $200 billion.
(Source: CNBC)
5. Others Coins can outdo Bitcoin
Today, most of the tokens are based on Ethereum, which implies there is a likelihood of Ether outdoing Bitcoin in the near future. This is clearly because the former offers a much wider range of utilities and has already witnessed popularity, pushed by the rise in NFT sales. In spite of being the first and oldest cryptocurrency, BTC can be overtaken by new ones in the upcoming years. Yet, Bitcoin can come up with advancements, stirring a strongly competitive environment with newer blockchains.
According to a market estimate, the NFT market can grow up to $231 billion in value by 2030.
(Source: Forbes)
6. Likely Disappearance of Meme Coins
Meme coins are known to be quite erratic and are mostly fueled by community hype and social media. No doubt, some investors have profited significantly from meme coins, and many others have lost money as a result of their extreme volatility. Besides, as NFTs become assets of real-world value with market development, meme coins can completely vanish.
7. Stronger hold of Stablecoins
Stablecoins are the third generation of cryptocurrencies. These include USD and CBDCs (Central bank digital currency) like E-yuan. Currently, there are hundreds of stablecoins in use. Being tethered to fiat currencies, stablecoins represent a good alternative for people who wish to tread a cautious path toward the DeFi sector. In other words, they represent a balance between conventional cryptocurrencies and typical fiat currencies.
8. Emergence of New Use Cases
With greater demand of cryptocurrencies and regulations in place, DeFi can change the face of several industries and lead to new blockchain use cases. For instance, data related to healthcare, real estate, credit rating, etc, can be tokenized as data on blockchains, and the related apps be converted into DApps!
Presently, utility NFTs are venturing into virtual properties, in-game items, identities and credentials, insurance, event ticketing, cause marketing, and reward programs, which are set to take a larger scale in the next five years.
Summing Up
In a nutshell, we can say that the upcoming decade will be an era of cryptocurrency trading, NFT infrastructure, Web3 commerce, and more. While the first half of 2023 did present a dismal outlook for stocks, assets, etc., the second half would see a turnaround. The next generation is set to embrace a decentralized economy to its full potential and thus, boost its value across the globe.
So, there will be no centralized monopolies but greater power and self-sovereignty in the hands of the general public. When you move through the internet, you will own whatever you possess and manage it solely.
