With 2021 being extremely harsh on digital currencies, it is a miracle that Bitcoin and a couple of others near the top have managed to stay afloat, and not only that but rather increasing in value when compared to the start of the year, setting the market’s value to a combined $2 trillion.
Despite this success and the currency’s entrance into the mainstream through the influence of wall-street and companies like Coinbase, experts claim that the regulatory issues these tokens have faced, along with their extremely volatile prices, will soon bring about the end of crypto as a whole.
Recent surveys among miners have shown that a large percentage of them believe that Bitcoin is set for massive dips in value in the following months, with finance professor Carol Alexander claiming she expects the coin’s value to drop as low as $10,000 in 2022, retconning any previous monetary gains the community has made over the course of the past 2 years.
She referenced the coin’s massive drops in value from 2018, which saw it hit a record low of $3000 right after reaching $20k only a couple of months prior.
Those using Bitcoin and another crypto to hedge against inflation might not be so lucky either, as the Federal Reserve’s plans to crack down on overvalued assets might leave those who invested in digital currencies dead in the water.
Crypto futures and market saturation
However, a large development is in the works for the crypto industry, presenting the possibility of investing in cryptocurrency futures, those being the financial derivatives that force an investor into buying or selling a certain asset later on, at a value set by a written and signed contract.
However, the concept doesn’t seem too retail-friendly, especially considering the risk factor that comes with it, given that a large amount of freshly-baked traders have their assets in cryptocurrency.
Naturally, as the market grew, so did the saturation of it by other cryptocurrencies, with Ethereum taking second place right after Bitcoin, putting the original currency at risk of being sidelined by newer or more trusted ones that haven’t shown much value fluctuation in a previous couple of months.
Experts believe that Bitcoin’s market cap next year will only amount to half of the value of all other coins on the market, possibly even less.
Navigating the Regulatory Hurdles of the DeFi Revolution: Challenges for Bitcoin Amidst $200 Billion Investment”
DeFi, or more popularly known as Web3.0 aims to combat this, with users and investors already sinking $200 billion into its services hoping for a new and refined version of a decentralized web-based system.
Regulators came down hard on crypto this year, as China banned the blockchain technology outright, forcing the nation’s crypto miners into other countries, or underground, far away from Xi Jinping’s watchful eye.
Other countries, the United States included, have taken an interest in slapping regulations onto this market, which was a monetary wild west up until this point, so it’s likely for the better.
The future of Bitcoin remains uncertain, and one thing is for certain – it will be an uphill battle against regulators, hackers and market saturation in the upcoming years. We’ll just have to wait and see if it can make it out alive.
Navigating the Regulatory Hurdles of the DeFi Revolution: Challenges for Bitcoin Amidst $200 Billion Investment”