Investors in cryptocurrencies were nervous when 2022 arrived. The price of Ethereum (ETH 0.61%) had increased by 409% over the previous year, while the leading token, Bitcoin (BTC 0.55%), had increased by 61%. However, the previous enormous spike in 2017 was followed by an ice bath in 2018, and in November 2021, the top coins began a declining trend. Was a more steep correction in the cryptocurrency market imminent?
It turns out that in the spring of 2022, bearish trends overpowered the largely optimistic market momentum of 2021. The invasion of Ukraine by Russia, rising inflation, and other macroeconomic issues caused a decline in the stock market. Following suit, cryptocurrencies experienced a sharp decline at this time, far faster than the S&P 500.
Prediction for the cryptocurrency market in 2024
It’s hard to predict with certainty what the bitcoin market will look like in 2024 and beyond. Questions still outweigh answers at this point. However, if the market develops further, you will be able to make wiser investment choices if you keep an eye on a few major crypto themes.
- A few important things that you should pay special attention to are as follows:
- Regulation both domestically and outside.
- widespread use of bitcoin payments in commerce.
- exchange-traded funds founded on cryptocurrencies such as Bitcoin.
- nations that have made Bitcoin and other digital currencies legal money.
The long-term trajectory of the cryptocurrency industry will be determined by how these problems evolve and are fixed. By the end of 2022, as governments and blockchain technologists work to refine their long-term cryptocurrency plans, the image might begin to take shape.
Still, a long way from now, a succession of incremental developments that began with the launch of Bitcoin in 2009, probably won’t end.
Why cryptocurrencies might be used as money in the future
In the best-case scenario, international regulators may collaborate to create a global framework for all types of cryptocurrency regulation by 2023 or later. That seems improbable now, though, given the many international perspectives on cryptocurrencies, which range from “Crypto transactions are illegal in China” to “Bitcoin is an official currency in El Salvador and the Central African Republic.” I don’t think there will be global unanimity on this topic very soon.
However, governmental regulations pertaining to cryptocurrencies are progressing. Leading the cryptocurrency regulatory process is a committee assembled by the Biden administration that includes Gary Gensler, the chairman of the Securities and Exchange Commission, and Janet Yellen, the U.S. Treasury Secretary. Yellen has been monitoring the industry for many years, but occasionally with skepticism. 2018. At the Massachusetts Institute of Technology, Gensler was a cryptocurrency instructor, teaching seminars about Bitcoin, blockchains, and other related subjects.
There is hope that a practical system may be built for investors, consumers, cryptocurrency firms, and traditional institutions, with highly knowledgeable individuals setting the tone for future laws. Knowledgeable authorities will be able to distinguish important and significant distinctions between, for example, a sophisticated ledger with smart contracts like Ethereum and a value storage system like Bitcoin. In the first half of 2022, Congress introduced a few legislation pertaining to crypto regulation; however, bureaucracy takes time, so this is a topic that requires careful consideration and in-depth research.
Cryptocurrencies may make their way into the digital wallets of many American consumers as government organizations figure out a regulatory framework and taxation structure. However, the United States is unlikely to follow suit anytime soon, despite the fact that Bitcoin became legal tender in El Salvador in 2021 and the Central African Republic in 2022.
But a lot more stores will probably start taking payments in virtual currencies that resemble cash, like Bitcoin, Litecoin (LTC -0.24%), or Dogecoin (DOGE -0.46%), which is a clone of Bitcoin. Politicians and regulatory bodies ought to act more quickly in response to the growing use of cryptocurrencies, and the blockchain systems themselves ought to gain from increased adoption.
Why cryptocurrency may not be the future of money
There are various ways that a better future could be postponed:
- In the upcoming years, legislators can procrastinate and fail to come up with a reasonable regulatory structure.
- One possible conclusion would be that digital currencies like Bitcoin and Litecoin are solely utilized by criminals and unscrupulous individuals, and that they have no place in the United States.
- Because digital currencies have an unstable value, retailers may object and insist on accepting payments using cash or credit cards.
- People’s confidence in digital currencies could be damaged by an abrupt spike in security breaches, malfunctioning technology platforms, and other risks to the security of blockchain-based payment systems. For instance, after TerraUSD (USDT -0.01%) collapsed, algorithmic stablecoins received a negative reputation.
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