Is Cryptocurrency the Real Future of Money?

Updated: December 27, 2021
by Cristian Morales

Cryptocurrency is one of the world’s hottest topics; it is evolving, and, as such, there is still so much about it we don’t know. Whether cryptocurrency is the real future of money is commonly asked around technology. In addition, many wonder about the technology’s capacity to disrupt traditional financial institutions.

Is Cryptocurrency the Real Future of Money?

The regulation of crypto spending may very well be around the corner, with many more people embracing the technology. Cryptocurrency is becoming a world phenomenon; more people opt to buy Ethereum and other cryptocurrencies and trade with them. Cryptocurrencies may become legal substitutes for fiat currency as they surmount regulatory hurdles. However, we don’t expect governments to sit by and watch as they lose control of the money supply without a fight.

Nevertheless, we believe that the real victim in all of this may not be fiat currency, for good reasons. Plastic cards, including debit and credit cards, and cash are slowly becoming obsolete as more people accept cryptocurrency. Therefore, we are right to ask: is cryptocurrency really the future of money?

Predictions Concerning the Future of Cryptocurrency

Bitcoin price has hit an all-time high recently, with more institutions purchasing from major cryptocurrency companies. The second-largest cryptocurrency, Ethereum, also hit an all-time high recently. With the growth in blockchain technology, we should expect more talks about cryptocurrency regulation. Lawmakers across the globe are figuring out ways to establish laws and guidelines that will make cryptocurrency safe for investors. Cryptocurrency regulation is arguably the biggest overhang in the cryptocurrency market worldwide.

Meanwhile, China recently made cryptocurrency transactions illegal, putting a break on crypto-related activities within the country. The United States hasn't stated any intention of banning crypto in the US; nevertheless, the standing of cryptocurrency is not clear. Unfortunately, the lack of strict cryptocurrency regulations poses higher risks for investors.

In African countries like Nigeria, we continue to see several back and forths relating to crypto regulation, transactions, and legislations. While we have heard the news of the Nigerian government banning digital currencies at some point, we’ve also seen the introduction of e-Naira. In Kenya, there continues to be a flourishing atmosphere for digital currencies and transactions to thrive.

Bitcoin ETF

There’s been a breakthrough with cryptocurrency ETF approval; Bitcoin ETF made its first debut on the New York Stock Exchange in October. The presence of ETF means a new and better way of investing in cryptocurrency. Bitcoin ETF lets crypto investors purchase cryptocurrency directly from traditional investment brokerages like Vanguard or Fidelity. However, some say the ETF is not enough as it does not hold Bitcoin directly; it holds its future contracts instead. Investors are waiting for an ETF that will hold Bitcoin directly.

A good indicator of how the cryptocurrency market fares is Bitcoin; it has the largest market cap in the industry. Nevertheless, volatility is one of the major issues of Bitcoin, the more reason for investors to make investments long-term. You would not have to worry about short-term swings of Bitcoin when you are in it for the long haul.

Alternatively, if you want to invest short-term, you must get a strategy that considers the price volatility. That way, you know when to leverage the cryptocurrency market, when to buy the dip, and when to hold your coins in your digital wallet.

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Reasons for Cryptocurrency’s Growing Popularity

More awareness of cryptocurrency is happening, with more people trading in Bitcoin, Ethereum, and other cryptocurrencies. There are several reasons why cryptocurrency has become so popular in the world today; below are some of them:

  • Cryptocurrency does not attract exorbitant transaction fees; on the contrary, very low fees are associated with using it.

  • Cryptocurrency is decentralized and isn’t associated with governmental bodies in the world. As such, cryptocurrency has the potential to be stable even in a terrible economy.

  • There is a huge potential for profit in cryptocurrency investments, with investors making money at every turn.

  • The use of cryptocurrency is getting easier thanks to more businesses and online companies adopting it. More businesses online are accepting cryptocurrency as payment for their goods and services, and it will get better. Other than businesses, industries and sectors are also accepting the use of digital currencies. We have artists and sportsmen who are paid in cryptocurrencies.

  • One of the most endearing things for those who invest in cryptocurrency is its optimum security; your identity and assets are securely protected. You also have full control over your financial resources and transactions as against what you get from the conventional financial sector.

Cryptocurrency Impacts on Economics

Cryptocurrency Impacts on Economics

Cryptocurrency has established itself as a viable currency source worldwide mostly because of its autonomy and convenience. Since its inception, many thousands of cryptocurrencies exist, and the number keeps growing. People enjoy Bitcoin and other cryptocurrencies because they provide a digital-based and unconventional currency. More so, cryptocurrency comes with mouth-watering incentives for entrepreneurs worldwide. The presence of cryptocurrency has made it easier for business owners to reach international markets rather than restricting themselves to national markets.

Due to the ease of connecting with international markets, users can create relationships and build trust. Nevertheless, cryptocurrency still has its challenges, the most popular being inability to offer durable protection for its investors and traders. Cryptocurrency has undoubtedly provided a new technological way of performing business transactions. As a result, the cryptocurrency market has witnessed new buyers, allowing for smooth international trading.

The growing impact of cryptocurrency, nonetheless, still has a long way to go to becoming more accepted. Issues of volatility and environmental dangers of cryptocurrency mining all have to be considered.

Experts’ Perceptions On the Future of Cryptocurrency

Experts have given one or two thoughts on the future of cryptocurrency as imagining a future without it gets harder. One of the perceptions is that cryptocurrencies will disrupt the traditional financial system as more people will invest in cryptocurrency. The reason for that, as stated, is its ability to transfer payments across the world with little to no cost, delays, or currency fluctuations.

Another expert predicts that before the next 50 years are up, crypto and dollar will have more in common than crypto and silver or gold. There is no doubt concerning the longevity of encrypted algorithms being a medium of exchange and stores of value.

More so, cryptocurrency has proven useful for money transferring and speculations, a phenomenon that is likely to stay. Nevertheless, we should consider how and where to generate the energy needed to meet the demand of the growing cryptocurrency market.

In addition to that, central bank authorities are making moves to develop cryptocurrency regulations. They have recognized that digital currencies are a big part of the digital economy and will become mainstream soon.

In conclusion, while we are free to analyze cryptocurrency’s future, the fact is that it is still a new and speculative investment. Cryptocurrency doesn’t, as yet, have enough history to back up the predictions made concerning it. So while we value experts, no one really knows what the future holds for cryptocurrency. As such, cryptocurrency investors should go in with their eyes wide open and be prepared to encounter losses.

You should ask yourself what you would do if, one day, cryptocurrency becomes banned and worthless. Therefore, you want to keep your investments small, only invest what you can afford to lose, and set other financial goals aside from cryptocurrency investment.

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About the author 

Cristian Morales

Freelance writer and graphic designer with a can-do attitude. I became independent after spending 6 years in the hospitality industry and 5 years in banking & finance. I'm an all-rounder guy, open to working with like-minded people.

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