The crypto rialto is becoming a big force in the global financial markets. An increasing part of the investment portfolio, large investors are ready to invest in digital assets. At the same time, a significant part of the investments is not directed directly to cryptocurrencies, but to crypto projects.
Thanks to this, the industry is expanding, new mechanisms are emerging to solve the main problems of the digital assets market. Given this, the question arises what is forth crypto? Which sectors of the cryptocurrency economy will continue to develop, and which ones will finally go into oblivion? In this article, we will answer all the main questions about the future of crypto assets.
Global vision of crypto
First, let’s talk about the fundamental and global trends in the development of the crypto market. The first thing that the crypto community needs to be ready for is tightening access to liquidity. Coronavirus, and after it the war in Ukraine, had a negative impact on fiat money and the US dollar.
In this regard, the FOMC has already raised its key rate by 25 basis points. The market took this as a positive signal. Investors have decided that the tightening of monetary policy will take place gradually in order to reduce volatility and damage to stock markets.
However, many members of the FOMC began to declare the need for a more radical increase in the key rate. As a result, the FOMC may raise key rates to 3% -3.5% in the next nine months. This will be a strong blow to the stock and crypto market. The amount of money in circulation will decrease, and hence the volume of investments.
Now let’s talk about the good. Biden signed a Decree on the need to develop a legal framework for regulating the cryptocurrency industry. Someone took this news negatively, but in the long run it opens the doors of the cryptocurrency market for all investors.
Thanks to legislative protection, large investors will invest more money in the cryptocurrency market. This will entail the development of new projects related to blockchain technologies, as well as increase the capitalization of the main digital assets and the market as a whole.
Prospects of the whole crypto market
Let’s say a few more words about the cryptocurrency market in general. The trend to separate bitcoin and the altcoin market appeared a few years ago. And she is correct, as there is a general bull market rally that occurs due to the increase in the price of bitcoin. And there is a season of altcoins, when the main crypto moves in a closed range, and alternative digital assets update their highs.
As of April 10, 2022, $3 trillion is the all-time high. Given the FOMC policy, investors simply do not have enough money to update this result in the current state of the crypto market.
Future of the Bitcoin
As for bitcoin, its future is vague right now. Cryptocurrency is dependent on the stock market, and therefore is declining. But there is a tendency to use bitcoin as a fallback or hedge against inflation. If investors make the right choice, then digital coins can approach a historical record in 2022.
Bitcoin will become one of the key financial instruments in the future. Last week, miners mined the commemorative BTC. Now, out of the 21 millionth issue, 19 million BTC coins are in circulation. The asset will become even more valuable due to its scarcity due to limited issuance.
State regulation of the cryptocurrency and bitcoin market will allow large funds to invest large amounts in the asset. Bitcoin can be a valuable reserve vehicle, as proven by the Luna Foundation and MicroStrategy. The emergence of security guarantees will encourage investors to actively use Bitcoin as a backup tool. Massive investments will multiply the market capitalization of the cryptocurrency.
Future of the altcoin market
Bitcoin has a strong influence on the altcoin market. That’s how it happened historically. But even in such a situation, altcoins have their own period of growth. The third quarter is historically a very profitable month for the altcoin market. There is no reason to believe that the third quarter of 2022 will be an exception.
The altcoin market has great long-term potential. Many projects develop their own ecosystems and become much more useful and accessible than bitcoin. Altcoins are the link between the classical financial system and cryptocurrency payments. Therefore, the altcoin market will continue to develop and gradually individual coins will update historical records.
The future of stablecoins
It is necessary to dwell separately on stablecoins. The overall share of stablecoins will remain at about the same level. But in the long term, stablecoins will remain in demand as long as the US dollar remains in demand. Eventually, stablecoins will replace USD as a stable medium. This opinion was expressed by Hasib Qureshi, Managing Partner of Dragonfly Capital.
DeFi, metaverses and NFT outstanding prospects
The biggest progress awaits the DeFi and NFT sectors of the crypto market. Balaji Srinivasan, general partner of a16z and former CTO of Coinbase, believes that the world will move to a “DeFi matrix” in the future. All cryptocurrencies, tokens, CBDC, securities will be stored in a single digital wallet. All of them will become interchangeable and will be traded on global asset exchanges. The NFT market will also continue its development and become even more assimilated into the metaverses. CitiBank has stated that the metaverse market will reach $13 trillion by 2030. The number of users will increase to several billion. NFTs will play a key role in building the functionality of the metaverses. Non-fungible tokens will become a digital analogue of a certificate of intellectual or physical property rights.
The current state of the crypto market should not prevent investors from thinking strategically. The cryptocurrency market continues to develop and evolve. There is no doubt that after five years, the level of adoption of digital assets will increase. Digital assets will take a special place in the development of high technologies and will become a bridge between the real and virtual worlds.
MA in English and literature. I have a passion for writing, and I read – A lot! Recently I became super interested in the economy and especially decentralized economy and cryptocurrency. This blog is a hobby of mine, I like to put together pieces from what I am researching every day.
MA in English and literature. I have a passion for writing, and I read - A lot! Recently I became super interested in the economy and especially decentralized economy and cryptocurrency. This blog is a hobby of mine, I like to put together pieces from what I am researching every day.