The world of cryptocurrency seems to be progressing as more people discover its lucrative nature. There is much anecdotal evidence that people are profiting from cryptocurrency transactions. Not surprisingly, governments are also starting to pay attention to what is happening in the industry. It pays to be informed. So, you should examine certain trends in the cryptocurrency world that may help the industry to progress further.
1. Bitcoin Expected to Rise Further
The most famous cryptocurrency right now is Bitcoin, which may be due to the fact that it is seen as the original cryptocurrency, aside from it having wide media coverage. Some analysts seem to think that the Bitcoin trading price hasn’t really peaked yet so there may be some more gains for sellers this 2020. Analysts claim that the price of Bitcoin may easily soar to $10,000, which is a good motivator for trade to intensify.
If you intend to trade in Bitcoin it pays to read up on it first so you know what you are getting into. One site where you can read valuable reviews and articles about Bitcoin trading is Crypto Head, among others. Since Bitcoin is the oldest cryptocurrency around, it isn’t surprising that more and more people are getting into Bitcoin trading nowadays. Just be sure you are fully knowledgeable before you trade to minimize any risks.
2. More Cryptocurrency Firms May Go Public Soon
This 2020, there may be more initial public offerings or IPOs in the cryptocurrency world. This move to initiate IPOs is motivated by the robust cryptocurrency market, which may help support the shift to IPOs in the long run. A successful IPO would mean mainstream investors are accepting cryptocurrency companies that are now jostling for a position on traditional stock exchanges. In return, cryptocurrency companies would be able to receive investments from the public to help power their activities in cryptocurrency trades.
3. 2020 To Witness Less Cryptocurrency Exchanges But More Brokerages
This year, it is also possible to see fewer cryptocurrency exchanges, which means many of the smaller ones will either die out or merge with similar smaller players. At the same time, more people will set up their own brokerages to benefit from the shift of traditional players to the cryptocurrency field due to liquidity and their ease at acquiring more customers. The move to consolidate corporate players in the cryptocurrency industry helps weed out weaker players from the more robust ones. Traditional financial institutions entering the cryptocurrency world would be able to supply their expertise at managing currency trading in the fledgling cryptocurrency trading field.
4. Central Bank Digital Currencies To Remain With Status Quo of Recordkeeping
Recordkeeping of Central Bank Digital Currencies (CBDC) by central banks will probably remain the same this 2020. However, this may change sharply in 2021 as momentum builds up throughout 2020. This affects the cryptocurrency world because central banks may eventually take over recordkeeping of cryptocurrency as well. This would be unprecedented but understandable as governments tend to get nervous about lucrative financial tools like cryptocurrency that are unregulated and thus volatile. By taking over recordkeeping functions, central banks may be able to reduce the volatility and provide assurance to the public that cryptocurrencies are safe to trade with, just like CBDCs.
5. Japanese Lawmakers Express Interest in Digital Currencies
Many central banks of various countries are opting to explore the feasibility of developing digital currencies that would be under the eye of such central banks. One example is China, which is aiming to develop its own digital currency (dubbed “digital yuan”). Japanese lawmakers may also develop a Japanese form of digital currency (tentatively known as the “digital yen”). This Japanese digital currency in the works may take the form of a collaboration between the private sector and the Japanese government.
The Bank of Japan is already in talks with five different central banks to see what digital currencies are all about. These central banks are the Swiss National Bank, the Sveriges Riksbank of Sweden, the Bank of Canada, the European Central Bank, and the Bank of England.
Though cryptocurrencies are presently unregulated, a regulated cryptocurrency may eventually be perceived as safer investments by the public because the central banks would be monitoring it.
6. Enhanced Cryptocurrency Security
HM Revenue and Customs, the tax authority of the United Kingdom, is exploring ways to track down cybercriminals who might now be eyeing cryptocurrencies as a means to evade taxes and conduct money laundering activities. The cryptocurrency field is presently unregulated, which leaves the door open for cybercriminals who are both tech-savvy and anonymous. It would be best if the security of cryptocurrencies becomes the priority of governments, particularly central banks, to make cryptocurrencies safer to deal with.
7. Custodial Role of Banks for Cryptocurrencies Explored
As cryptocurrencies become more popular, it isn’t surprising that banks may eventually be allowed to accept cryptocurrency assets for safekeeping on behalf of customers. These assets can include digital securities, virtual currencies, and open blockchain tokens.
Banks may evolve as well, in terms of being allowed to initiate transactions with these digital assets on behalf of their owners through profit-oriented activities. This may depend on governments imposing strict regulations for cryptocurrency-oriented businesses for the safety of the public. Central banks then would be able to exercise regulatory powers over cryptocurrency transactions since that is a major concern. A cryptocurrency field monitored daily by the central bank of a country would be one that is safer to trade in.
Because the business of cryptocurrency is so lucrative, it is not surprising that so many trends are showing robust activity in this financial field. For one, Bitcoin is believed to have hidden earning potential that may peak this 2020. Cryptocurrency companies are organizing to offer IPOs as they become more accepted by mainstream investors. And while cryptocurrency exchanges may become fewer, there may soon be more brokerages this year. Enhanced security for cryptocurrencies are also being explored, and the involvement of central banks in cryptocurrency transactions may also strengthen over time for safety purposes.