Over the last 18 months, the cryptocurrency market has experienced unprecedented growth, but its future still remains unclear. During the pandemic, many consumers and investors ventured into Bitcoin to try and make some income that would help them cope with the economic challenges at the time. Bitcoin, once only understood by relatively few people worldwide, is now quickly becoming a household name.
By 2030, it is expected that the global crypto market will have tripled, hitting an estimate of around $5 billion. The recent upsides in the cryptocurrency market have also attracted institutions such as banks as they try to cater to the increased demand. A good example is the bitcoin custody service that was recently created by the U.S. Bank, which enables hedge funds to take a stake in digital currency. Hedge funds offer some worthwhile benefits over traditional investment funds. This includes a variety of investment styles and capital raising for hedge funds that provide investors the ability to precisely customize an investment strategy.
Even though an increase in investors means a greater potential for other small investors, the ability of Bitcoin to operate outside traditional finance will be improbable. These big Institutions have enough money to invest in the market and consequently influence it. Over time, independent users will have difficulty mining since the network will be controlled by several companies with huge amounts of electricity and computing power required to mine at scale.
Additionally, when you factor in the substantial corporate investments, such as the 20% rise of Bitcoin in a single day caused by Tesla, the independence of the crypto market continues to be in doubt. The success that Bitcoin has achieved has made the platform itself go corporate.
Alongside institutions investing in Bitcoin, crypto mining and trading have attracted government overseers. Bitcoin and the cryptocurrencies at large have undergone little moderation or regulation compared to traditional investment categories. Bitcoin has been able to spread around the globe as a distinctive decentralized financial asset.
Government oversight in the cryptocurrency market will matter a lot to investors in the future. Some investors welcome this regulation since it legitimizes the crypto market, enabling more businesses to adopt digital currencies, minimize incidences of fraud, and reduce volatility.
However, some investors fear that regulation might limit the peer-to-peer nature of Bitcoin, which was one of the sole reasons that attracted initial investors. Bitcoin regulation also doesn’t stand with the initial goal of the platform; an anonymous and decentralized marketplace.
According to Dr. Jordan Sudberg, the future of Bitcoin will not only be influenced by regulators. Still, it will also be shaped by brands currently entering the platform to cater to the demand that the governments have ignored.
The future of Bitcoin may also mean changing the profile of investors and assessing the demand of the “mainstream” audience. Older investors might be attracted to the market by traditional payment companies which offer education. The platform may also become stable and feel safer as more businesses continue to accept digital currencies.
According to Dr. Jordan Sudberg, a safe Bitcoin ecosystem will enable widespread adoption. This will lead to other changes in the Bitcoin payment mechanism since its blockchain will be required to handle numerous transactions in a short period.