Cryptocurrencies made a move from mere concepts into actual functioning products with the creation of Bitcoin back in 2009. What initially started as one cryptocurrency has grown into over a thousand digital currencies that currently encompass the around $211 billion cryptocurrency market. Their existence teased an innovation breakthrough that could allow for an open, safe, and reliable financial system free from centralization (at least that’s the hype). Moreover, the market needed a swifter and more secure payment system that also guaranteed a user’s anonymity. Therefore, in the years proceeding 2009, cryptocurrencies slowly gained popularity and attention from the media and investors.

After significantly generating high returns for early investors, cryptocurrencies sparked widespread debate over whether they could one day replace conventional currencies. Of course, this issue in itself attracted government scrutiny which subsequently led to the rise of cryptocurrency regulations. Governments seemed to agree on one thing, that cryptocurrencies were extremely volatile, vulnerable to hacking and manipulation, and offered untraceable avenues for illegal activities. Despite this, digital currencies still have the potential to emerge as transformative payment innovations. However, shortcomings and concerns such as cybersecurity, high energy consumption, and increased regulatory barriers have most people skeptical about their future.

The Current State of the Cryptocurrency Market

Currently, cryptocurrency awareness is at an all-time high. However, cryptocurrencies are yet to become mainstream. One of the primary reasons for this is volatility. Cryptocurrencies are synonymous with price volatility. For instance, Bitcoin’s price rose all the way up to $19,000 barely crossing the $20,000 mark while Ethereum traded for about $1,400. Back then, the cryptocurrency market was extremely solid, and most investors were optimistic about the future of the market. Fast forward to this year and the cryptocurrency market has been on a downward slope. Most cryptocurrency prices are in the red with trading volumes dwindling and projects struggling.

Bitcoin has lost about 70% of its value, and at the time of this writing, it was trading at $6,589.48. Ethereum, on the other hand, has had an even poorer performance, losing about 80% of its value over the last eight months and was recently trading for about $209.07. Unfortunately, these losses have driven some crypto investors to turn their backs away from investing in cryptocurrencies entirely. Moreover, these losses are on a global scale, thereby, creating a massive plummet in both cryptocurrency prices and activity since January this year. The bear run is taking a significant toll on the market, and the recent media reports are evidence of the situation.

Expert Opinions on the Future of Cryptocurrencies

  • John McAfee

John McAfee has been an avid supporter of cryptocurrencies especially Bitcoins ever since their debut. Over time, John has shown his support for Bitcoin by continually investing and offering predictions for the crypto. He is sure that Bitcoin will become the new world standard to the point of dethroning the dollar and later gold. So confident in his views is John that he publicly announced that he would eat a part of his body if Bitcoin doesn’t hit $1 million by December 2020.

  • Andreas Antonopoulos

In a video uploaded to his YouTube channel, Andreas warned his viewers of how a Bitcoin exchange-traded fund (ETF) could be bad news for the industry. Although Bitcoin ETFs have the potential to allow new capital to flow into the sector, Andreas warned that it wouldn’t be great for bitcoins and the broader crypto landscape. He stated that if the SEC approved the ETFs, people would be able to purchase BTC without dealing with crypto-exchanges which would violate the P2P principle of cryptocurrencies.

  • Nouriel Roubini

Nouriel Roubini, an American economist, has referred to Bitcoin as the mother of all bubbles that’s worse than the tulip mania. Nouriel further points out that Bitcoin has been around for almost ten years and has only one application. Nouriel believes that Bitcoin’s value is slowly decreasing to its real value which happens to be zero.

  • Yves Mersch

Yves is a member of the European Central Bank’s executive board. He has called for a global clampdown on all digital currencies as they pose a potential threat to all existing financial systems and financial stability. He has also criticized Bitcoin’s slow transaction processing time, claiming that if you bought a bunch of tulips, they would probably wilt before a Bitcoin transaction is confirmed.

  • Augustine Carsten

Augustine is the head of Bank for International Settlements. According to him, the whole cryptocurrency market is either a bubble waiting to burst, a Ponzi scheme, or an outright environmental disaster. He further stated that if governments don’t act quickly, cryptocurrencies could become a threat to current financial stability.

  • James Altucher

James, a hedge manager, and private investor believes that cryptocurrencies have the disruptive capability of depriving global central banks of their money issuance monopoly. He compares it to how the internet took the monopoly away from the telephone industry concerning communication. James further states that soon, governments will have no choice but to switch to digital currencies, prompting them to create national cryptocurrencies.

The Future of Decentralized Cryptocurrencies

The future of decentralized cryptocurrencies is one that cannot be comfortably predicted. However, if past disruptive innovations can serve as examples of what to expect, then the answer weighs heavily on the positive side of things. On the downside, though, digital currencies are prone to misinformation and social engineering. Naïve investors are easy prey for cyber extortion, market manipulation, fraud, and other risks that have (as it is claimed) prompted governments around the world to regulate the industry.

Some countries, for instance, China, have wholly banned cryptocurrency use and trading. Others, such as Singapore and Malaysia, have created conducive environments for the growth of blockchain and digital currencies. Lately, there is a new trend in which some countries are issuing regional and centralized tokens that citizens are (sometimes) forced to use. A great example is Venezuela and its national digital currency the Petro. Players in the industry speculate that other governments are bound to follow the Venezuelan way of issuing mandatory digital currencies.

Conclusion

One of the most frequently asked question in the crypto sphere is about the future of digital currencies. The cryptocurrency market saw spectacular gains in 2017 (with extreme volatility), especially in the last quarter. So far in 2018, digital currencies have experienced extreme volatility coupled with a downward trend in prices and overall activity in the industry. While some investors highly celebrate their existence and apparent freedom from government control, others, on the other hand, highly criticize cryptocurrencies and the industry at large. Despite all of this, we remain hopeful about the future of digital currencies. We encourage you to check out our advanced and secure, multi-asset, digital wallet app, Blockchains.my (BCMY) if you’d like to venture further into cryptocurrencies.