Ever heard of cryptocurrencies? Even if you hadn’t previously, the chances are you are aware of it now. They have been at the center of attention when it comes to financial news. This is because they are disrupting the market in a way no one could have imagined. Who could have predicted the boom cryptocurrencies have experienced?
Bitcoin alone has a market capitalization of 101.96 billion US dollars. Ever since its inception in 2009, digital currencies have remained a risky investment. However, slowly they are going mainstream. Many believe that in the next ten years, cryptocurrency will take over the financial market. Here are signs that provide some authenticity to this line of reasoning.
1. Increasing use of cryptocurrency in the automobile sector
It is safe to say that the automobile industry has been heavily dependent on the traditional financial market. After deciding you want to purchase a car, you pay for it via the bank, right? Well, this is changing.
Security coupons like the AutoCoin delivered by The Autoblock are now being used for automobile transactions. The fact that cryptocurrency is now being used to carry out significant transactions like those concerning automobiles showcases that the digital currency might be taking the place of hard cash and currencies.
One might wonder why people are moving towards digital currencies for such purchases. This is because blockchain technology allows them to eliminate intermediary cost. Since data you share through the technology is encrypted, it also reduces the chance of identity theft.
2. Experts believe cryptocurrencies will take over national currencies
There is a reason why some people are referred to as experts in their fields. What they predict is backed by the experience of the industry they operate in. The next sign that cryptocurrencies are the future is because many experts believe it to be so.
One such expert named Thomas Frey has predicted that the current continuous growth of cryptocurrencies signifies the potential they have. According to him, if the current growth trends were to continue, we might see at least 25% of all national currencies being displaced by various digital currencies. This is because more and more people realize how efficient cryptocurrencies are and are moving towards. Cryptofinance has become a phenomenon whereas before you couldn’t even consider financing options other than the traditional ones.
3. The trend of growth while all else fumbles
2017 might have been an excellent year for cryptocurrencies. However, the same cannot be said about other currencies. Traditional currencies are heavily dependent on the geopolitical environment that surrounds them. And since 2017 wasn’t exactly a solid year politically and economically, many currencies reflected the effect. For instance, the political upheavals in the US, UK and Middle East lead to a significant downward pressure of their currencies.
However, even at this time, cryptocurrencies continued to increase in value. This is because many people realized how the centralized system is becoming an impediment. Therefore, they find the decentralized system of cryptocurrencies to be a much better safe haven. However, as the digital currencies are getting popular, governments realize how dangerous the unregulated asset can be. Hence, there is also a rising trend to regulate it, while some countries like China ban it altogether.
4. The Rise of Crypto trading
The stock market has always been an excellent way of earning money. The same principals of a stock market are now being applied to crypto markets as well. Just like the masses invest in the stock market, many are now investing in the crypto market. The incentive of profit-making fuels such trading endeavors as well.
However, while stock markets might be limited to a location, the crypto market is not. Investors that prefer playing in the global field are finding crypto trading to be much better than trading stocks. Mind you; it is not impossible to go global in the stock market. However, the process of investing in the stocks that aren’t present in your country is very long and complicated. But, crypto trading is a piece of cake.
So, slowly, IPOs are being replaced by ICOs. The ease of investing in ICOs compared to IPOs indicates that more people are likely to switch to crypto trading in the next few years. If the growth of bitcoin and other currencies will continue, it is possible that soon crypto trading will be considered as a primary mode of investing.
What would happen if cryptocurrencies took over financial markets?
Some signs indicate the cryptocurrencies might be the future. Whether this prediction comes true or not is something we all will have to see.
It is also essential to analyze what would happen if this transition was to occur. Let’s say cryptocurrencies take over the market and become mainstream. What will be the effect of this?
We as spenders and consumers are used to fiat money. The value of such currencies can be manipulated very easily. Governments do it all the time. The difference between current currencies and a crypto future is that their value cannot be changed as easily as fiat currency’s value. This means that geopolitical events are less likely to affect the purchasing power of the masses.
While this might be good news for consumers, governments would not fare well. After all, they won’t be able to have the same monetary control as they do currently. In times of financial distress, governments may react by printing more money to increase supply. When all is mined, this option goes out the window. Only time can tell how governments will cope if such a change occurred.
Anyone who thinks cryptocurrencies are a fad that will soon disappear, think again. Ever since its inception in 2009, the currency has been growing. And if conditions remain favorable, it will continue to do so. If you haven’t hopped onto the bandwagon, it’s time to start looking into these digital currencies. After all, you wouldn’t want to be left behind, right?