The days when cryptocurrencies were a niche are long gone. Nowadays, we’re talking about a global force in the world of finance. Both individuals and institutions are accepting crypto. As a child of modern technology, its growth is still influenced by online trends and events. By looking at digital currencies right now, we can see the events that influence them and derive their future from them.
Current Crypto Trends
If you’re even remotely into crypto, you know it is an ever-evolving organism. Some trends disappear faster than they appeared, but some stand firm and still affect how digital currencies are perceived.
Rise of Stablecoins
Stablecoins are cryptocurrencies designed to mimic fiat currencies. They are pegged to traditional currencies (Euro or Dollar) to remain stable. What stablecoins excel at is maintaining the stability of standard currencies and avoiding the volatility of Bitcoin or Ethereum while offering the benefits of fast transfers and the global reach of cryptocurrencies.
The most popular stablecoins at the moment are USDT and USD Coin (Tether and USDC). These are the digital equivalent of cash used in remittances and trading. Stablecoins are at the forefront of decentralized finance (DeFi). People use DeFi to lend, borrow, and trade without the presence of traditional banks.
Despite their evident benefits, stablecoins are still under intense scrutiny. Regulatory bodies are worried about financial stability and how stablecoins are affecting it. Furthermore, they are defensive when considering the possibility of a stablecoin failing or even struggling to keep a hold on its peg. Thus, we are currently facing a wave of attempts by regulatory bodies to put stablecoins under their wing worldwide.
Adoption of Central Bank Digital Currencies (CBDCs)
As we said, cryptocurrencies have gone a long way from being an obscure niche to being created by governments and used as a main currency in industries such as iGaming and reputable igaming content aggregators such as hub88.io. Digital currencies such as Central Bank Digital Currencies (CBDCs) are backed by governments. Central banks are behind them, unlike the decentralized presence of BTC.
You’d be surprised to hear that China is the leader in this domain, with its digital Yuan already in use in some regions. Countries such as Sweden and the Bahamas are already in the testing phase of their digital currencies, while the USA is considering it.
CBDCs aim to improve financial inclusion, reduce costs, and modernize payment systems. Once they receive regulatory support and handle privacy and control issues, they will achieve a balance with regular currencies and gain public trust.
Key Events Impacting Crypto
While most cryptocurrencies are highly volatile, and we remain unsure of their triggers, they will be controlled in the future by regulations and institutional adoption.
Regulatory Changes
Even as we speak, many governments worldwide are working on creating a crypto regulatory system. This system would prevent fraud, protect investors, and avoid using cryptocurrencies in various illegal schemes. The leaders in these attempts are the USA and EU, which are looking to regulate crypto as soon as possible. The crypto industry needs clear rules, and governments are still deciding how to impose them.
Institutional Adoption
Some large institutions are already paving the way for crypto’s broader acceptance. The best examples are Tesla and MicroStrategy. These companies have BTC on their balance sheets and are buying this crypto. Furthermore, major payment giants such as Visa and Mastercard are integrating digital currencies. Crypto is becoming a part of mainstream finances, jumping from its retail beginnings to what we have today with just a few institutional changes in regulations and market clarity. They will be as good as fiat.
Market Reactions to Events
Due to its decentralized nature and location in the ether of the Internet, cryptocurrencies are highly responsive to news. Many events influence their price spikes and drops.
Price Fluctuations
Even the most prominent crypto players, BTC and ETH, are volatile. Sharp swings are influenced by plenty of factors, with new technologies, major hacks, and regulatory announcements being the main drivers. For example, when China banned BTC mining, its price dropped, while Elon Musk managed to raise the cost of the meme coin Dogecoin by tweeting about it.
Investor Sentiment
Investors are humans, after all. Their opinions are influenced by never-ending news cycles. Confidence is boosted by new partnerships among crypto giants or regulatory approvals, while it drops due to negative news and security breaches. Also, social media platforms, as we already mentioned, can influence the flexing of the price of digital currencies.
The Future of Digital Currencies
It can’t be predicted! You need to know this. We know that it will be influenced by past, present, and future events. The events that will affect it for sure include:
* More regulation
* Broader adoption
* Integration with traditional finance
Crypto is not just a currency. It is a way to exchange goods in the digital age. Will it replace traditional banking means in the foreseeable future? No. Will it gain more traction through innovation, policy, and the needs of people and businesses worldwide? Yes.
