Building Trust in the Crypto Ecosystem and Looking to the Future – Bitcoin (BTC/USD), Ethereum (ETH/USD)
While the year 2021 was dominated by cryptocurrencies and other digital assets, 2022 has been a rather painful reminder that the crypto industry is still in its infancy, reflected by a more than 50% correction in the prices of major cryptocurrencies since the peaks of 2021.
A large portion of the new crypto investors who entered the cryptocurrency space last year are staring at huge losses and are on the verge of losing their conviction about the future of this volatile asset class.
However, diving into finer details such as the various innovations being introduced, new projects being launched and increasing institutional investor participation, it seems reasonable to assume that the crypto ecosystem is just overhauling itself for the next stage of growth.
Also read: World’s top banks have 0.01% exposure to cryptos: Report
Cryptocurrencies are entering mainstream adoption
With nearly 600 crypto exchanges worldwide serving more than 320 million crypto investors globally, cryptocurrencies have found acceptance among a broad population base in major economies today, according to statistics
In fact, in countries such as the United States, South Africa, Russia, Vietnam and Nigeria, more than 10% of the population has invested in cryptocurrencies.
Moreover, other digital assets such as non-fungible tokens (NFT) have also been adopted.
This is indicative of the larger trend of growing crypto interest among the internet-savvy population.
Institutional investors have also made a beeline for popular cryptocurrencies such as Bitcoin BTC/USD and Ethereum ETH/USDshored up its investments since the outbreak of the COVID-19 pandemic.
As a larger number of crypto fans and investors continue to enter this asset class, the current bearish sentiments could see a reversal and lead to the start of the next bull cycle in major cryptocurrencies.
The impact of impending regulations that will define crypto’s future course
Despite countries such as Singapore, Switzerland, Malta, El Salvador, Luxembourg and a few others adopting balanced crypto frameworks that promote crypto innovation, both investors and crypto entrepreneurs continue to await the upcoming crypto regulations in major economies such as the US
With the US contributing the largest number of crypto investors by volume, any developments will be closely watched by the global crypto community.
Also read: White House publishes framework for crypto regulation: Could it be a digital currency from the central bank of the United States and more
Also, while expectations are muted for countries like China to relax their stance on these new digital assets, other Asian economies like India are expected to confirm their own crypto framework.
If everything falls into place, the combined effect of increased investor interest and the introduction of pro-innovation crypto regulations should help further increase crypto adoption, and provide a further boost to cryptocurrency prices as well.
Building impeccable governance structures to create a trustless ecosystem
Crypto founders and developers have shifted their focus to building sustainable blockchain ecosystems with cross-chain interoperability.
This is a marked shift from simply seeking user adoption to providing a more connected and seamless user experience. The decentralized finance space (DeFi) is undoubtedly experiencing the largest number of developments, followed by firms building the Metaverse.
As more users move to consume in the Web3 world, it will be of utmost importance to ensure that crypto platforms remain secure and scalable.
With this in mind, blockchain protocols like Ethereum are making major changes to their governance protocols, even changing their consensus mechanism with an eye to the future.
Low transaction or gas fees, high transactions per second (TPS) and unparalleled security will be key aspects that will therefore remain the main thrust of the crypto industry going forward.
Move away from speculation to benefit-based investing
The current crypto winter has humbled even the most ardent crypto fans, while critics continue to be amazed by the array of real-world use cases that the crypto ecosystem has spawned.
Investors would therefore be wise to take a more long-term approach and limit blockchain projects that build the future of the Web3 world.
This can lead investors to a more value-driven investment strategy and will reduce their chances of throwing capital at dud projects that have little or no real benefit.
As cryptocurrency prices hover near crucial support levels, it will be interesting to see how all of these factors play out and determine the course of the crypto industry in general.
Also read: Benzinga to give away $1000 in ApeCoin: Could you be the lucky winner?
