The newfound optimism around cryptocurrency as the ‘finance of the future’ seems to subsume the hype that started since its evolution.
Strides blockchain technologies have been making, and constant widening of the regulatory windows in a few countries have watered down the volatility in the cryptocurrency industry, arguably. They have attracted hordes of enthusiasts—industry stalwarts and individuals. Most bewilderingly, the digital cryptocurrency bitcoin has been at the forefront of market capitalization, spurring trade interests in cryptocurrency. According to an estimate by Cambridge Centre for Alternative Finance (CCAF), at least 3 million people are actively trading in cryptocurrency at any given point in time. The industry is on the path of transition—from central banks questioning the integrity to some really exciting projects ready to take off in 2020. The maturation is still far-fetched. Nonetheless, companies aiming for legal compliance will push the envelope further toward the mainstreaming of new cryptocurrencies and set the tone for old ones.
In several ways, the cryptocurrency industry evolution will be different and alike in some respects. Among the various trajectories, some trends are likely to capture the imagination of industries, governments, and people more than others. The biggest five trends are enumerated below:
Halving, also called halvening in technical parlance, isn’t necessarily a new phenomenon in the cryptocurrency. This typically means that the reward for miner’s block production will be slashed by half. Particularly, bitcoin halving events have been there in the past. This is necessary to maintain the equilibrium of demand-supply of the cryptocurrency, and let it not catch an inflationary air. Interestingly, at any point in time, there can only be 21 million bitcoins. The math says that the halving event for bitcoin will happen roughly once every four years. During 2020, such events will elevate supply-side price growth, ultimately making it a more expensive commodity to trade. With that said, the large dollar earning will continue to attract miners.
Experts say that 2020 is the year of more regulations and government sanctions; undoubtedly, not all of it is stifling to the industry. Crypto coins are known for frenetic fluctuations. With governments in several countries become aware of the safety of cryptocurrency transactions, new regulatory frameworks will come to life in countries such as the U.S. and China. Cryptocurrencies as of now do not fall in the realm of legal tender, and the regulations vary widely across key regions. In 2020, numerous countries will allow cryptocurrency exchanges to have legal force, once they are registered with regional authorities. The mandate has been out in Canada: the exchanges in order to be legal must be under the radar of FinTRAC after June 1, 2020. Some regulatory agencies have taken a soft approach. A case in point is the Monetary Authority of Singapore (MAS). Cryptocurrency trading and exchanges are considered legal in the country. Governments in some countries will tread on the path of proactive cryptocurrency regulations; an example is Australia.
Several new cryptocurrencies went into oblivion even before they could get a foothold. Regulatory hurdles dampened the spirit of numerous investors, notably Mastercard and Visa, in recent years. But 2020 is likely to be different—the year will set the stage for crypto-friendly regulations. Facebook is likely to launch Libra and JPMorgan to launch JPM coin by 2020-end. The euphemism is so great that this might attract many fintech companies to invest in the cryptocurrency industry. Behemoths such as Goldman and Sacks may invest in trading. However, regulations will continue to remain as the bone of contention for the cryptocurrency industry.
The time for building a symbiotic relation between blockchain and AI has come, concede experts. The year will see the industry making efforts toward integrating machine learning and AI into the blockchain, the key technology driving cryptocurrency transactions. Blockchain will extract the higher value of AI, while AI will make cryptocurrency transactions more secure. In 2020, more companies will harness the potential of such technological partnerships.
The upgrades do not come very often. However, they are essential in ensuring the privacy and general scalability of cryptocurrencies, particularly of the Bitcoin network. The year 2020 will see stakeholders benefit from some crucial updates to the Bitcoin nodes.
Keep in mind that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. We try our best to keep things fair and balanced, in order to help you make the best choice for you.
