“It’s the subsequent big revolution, just like the internet was.”
“No… it’s a bubble!”
Love it or hatred it, cryptocurrencies have now grown to a point where they can't be ignored. The CBOE and CME have launched their possess cryptocurrency futures, the SEC and CTFC have gotten involved, and pretty much every mainstream announcement that matters discusses cryptocurrencies one way or the other every day.
In other words, cryptocurrencies are here to stay — at slightest for the foreseeable future.
What cryptocurrency trends should you watch out for, though. What will drive the cryptocurrency landscape in the foreseeable future? Below are 4 trends to watch out for:
More stablecoins and increasing marketplace stability
The cryptocurrency marketplace has survived a lot of things: major sell hacks, impasse from the US Securities and Exchange Commission (SEC), ban on cryptocurrency ads by Google, Facebook, Twitter and other online giants, and indeterminate supervision involvement and attempts at regulation.
All these factors have in some way been obliged for a large improvement in cryptocurrency marketplace cap, from an all-time high of over $850 billion in Jan to about $260 billion at the time of essay this.
Amidst these events many experts, eminent economists, and pundits have announced the genocide of cryptocurrency. But it hasn’t died.
However, many experts determine that one cause could finally bargain cryptocurrencies a deadly blow: the stablecoin Tether.
Most cryptocurrencies are pegged to Bitcoin and, due to Bitcoin’s outrageous cost swings and volatility, this affects the prices of other cryptocurrencies. The thought behind the stablecoin is to have a silver with a bound cost that isn’t theme to remarkable cost swings. This “stablecoin” is then pegged to, and corroborated by, tangible fiat banking to pledge the stability.
The most important of all stablecoins is Tether, and most exchanges now span every vital cryptocurrency — and some smaller altcoins — to Tether’s USDT which is equal to a dollar.
This is generally ostensible to be a good thing, because, due to being corroborated by the dollar, pegging a cryptocurrency to Tether creates it more fast than pegging it to the more flighty Bitcoin. Well, this should be the box presumption that Tether is indeed indeed corroborated 1:1 by the dollar as is generally assumed. However, ban reports to the discordant have emerged.
It’s been speculated that Tethers are mostly printed out of skinny atmosphere in response to marketplace conditions in sequence to manipulate cryptocurrency prices. It’s also been purported that about 48.8 percent of Bitcoin’s cost rice occurred within hours of new Tethers being released. In other words, there is clever reason to trust that Tether has been expelled severally in sequence to manipulate Bitcoin, and hence cryptocurrency, prices.
Now, this square isn’t about Tether per se. Several sources like Tether Report and Bitfinexed yield more minute and judicious information on the subject. The problem lies in Tether being the vital stablecoin cryptocurrencies are pegged to: Tether’s USDT is famous and used by every vital exchange, and Tether has the second top volume of all cryptocurrencies after Bitcoin according to data from CoinMarketCap.
Due to this high dependency on Tether, any explanation of controversial activity could send cryptocurrency prices crashing — with many experts presaging an up to 80 percent cost pile-up for Bitcoin.
The good news, however, is that the introduction and proliferation of more stablecoins, and reduction dependency on Tether will revoke the intensity after-effects should Tether be suggested to be a sham and safeguard more marketplace fortitude in general.
Bitcoin prevalence will increase
Bitcoin is positively the aristocrat of crypto — when it sneezes, altcoins locate the cold.
However, cryptocurrency observers would have beheld a trend in which Bitcoin dominance has solemnly been eroding — at 38 percent at the time of this writing, Bitcoin prevalence is at one of the lowest points ever. This is a distant cry from the 87 percent it started Jan 2017 with.
Despite the pointy decrease in Bitcoin dominance, it will only go up from here. In fact, we won’t be astounded if Bitcoin prevalence increases to 50 percent or more in the nearest future.
There are a few pivotal reasons because Bitcoin prevalence will increase:
1. Despite Bitcoin’s volatility, it has been more fast than other vital cryptocurrencies. Research from the BlackRock Investment Institute found that Bitcoin is significantly reduction volatile than the subsequent two most renouned cryptocurrencies — Ethereum and Ripple.
Just take a look at the draft below:
The fact that Bitcoin is generally reduction flighty than other cryptocurrencies, and Bitcoin’s synonymy with cryptocurrency to the normal new investor, will serve drive the marketplace dominance.
2. Many of the scaling issues plaguing Bitcoin are being addressed interjection to fixes like SegWit and Lightning Network. Perhaps the biggest hazard to Bitcoin’s prevalence is the scalability issues; due to the very singular number of sell upheld per second, the Bitcoin network gets bogged down as more people use the network.
This has resulted in some sell holding days to complete, which doesn’t accurately bode well deliberation the cryptocurrency’s volatility. With these fixes, however, these issues are addressed: the outcome is faster transaction times and a more fast Bitcoin.
3. Altcoins have always been shabby by Bitcoin cost movements. When Bitcoin cost goes up, altcoins go up. When it goes down, altcoins go down. This trend will prompt more and more investors to see Bitcoin as a safer store of value and serve seaside up the dominance.
Cryptocurrencies will spin more mainstream
Goldman Sachs is reportedly formulation to start the possess Bitcoin futures trade and assistance use the possess income to assistance the clients trade Bitcoin. UK-based Crypto Facilities also recently made news for rising the first regulated Ethereum futures agreement in the UK.
While many have claimed that the launch of futures will only H2O down the value of cryptocurrencies because it allows institutional investors to brief cryptocurrencies, researchers have found that the introduction of futures have aided mainstream adoption of cryptocurrencies. In particular, a investigate by the Federal Reserve Bank of San Francisco remarkable that the introduction of Bitcoin futures in 2017 helped inspire many pessimists to enter the cryptocurrency market.
When eight-graders are articulate about Bitcoin, you know it has left mainstream. However, many new investors are still entrance to terms with the impassioned sensitivity of cryptocurrencies, and as they do, not only will cryptocurrencies spin more mainstream but they will also spin reduction flighty due to an bargain of their nature.
The arise of decentralized exchanges
Decentralized exchanges will rise, and it won’t be too long into the future. While many experts are speculating that decentralized exchanges aren’t prepared for mass adoption yet, we trust that the arise of decentralized exchanges is more closer than is assumed.
Many factors will drive the arise of decentralized exchanges:
1. Centralized exchanges generally better the purpose of cryptocurrencies. The offered point of most cryptocurrencies is decentralization, and it’s mocking that the success and disaster of most of these decentralized cryptocurrencies depends on centralized exchanges.
This will change.
2. While the above point is practically not going to be enough to get many people to spin to decentralized exchanges, the fact that cryptocurrencies have now spin more mainstream and that many are saying how much of an impact exchanges are carrying on the cryptocurrency landscape — the Mt. Gox hack, the Bitfinex hack, the Coincheck hack and raid — will drive the need for decentralized exchanges.
3. Major players removing into the decentralized sell business will also drive adoption. Huobi recently announced skeleton to invest $100 million towards building the possess decentralized exchange, and Binance recently announced development of Binance Chain, the possess decentralized exchange.
With more vital players carrying stakes in decentralized exchanges, we can design decentralized exchanges to be reduction clunky and cart and more intuitive. As a result, mainstream seductiveness and adoption will increase.
While the cryptocurrency landscape is still nascent, there are a lot of sparkling developments. The arise of stablecoins, boost in Bitcoin dominance, more mainstream adoption, and the arise of decentralized exchanges are some trends to watch out for.
This post is part of our writer series. The views voiced are the author’s possess and not indispensably common by TNW.