Cryptocurrency is here to stay – and it’s getting more popular every day, with more and more Gen Z and millennial investors putting their money into this futuristic financial technology. From digital coins and blockchains like Bitcoin and Ethereum to meme coins like Dogecoin, non-fungible tokens or NFTs, and decentralized finance or Defi, cryptocurrency offers a smart alternative to banks and investment firms.
For many investors, cryptocurrency is more than just a form of payment – it’s about being part of a smart, evolving investment community that’s super online and a lot of fun. At the same time, cryptocurrency is serious money – more than a third of all millennial millionaires have half their wealth or more invested in cryptocurrencies, while half of them own NFTs.
Above all, cryptocurrency allows investors to be independent of traditional financial institutions. Instead of relying on financial advisors, cryptocurrency investors have the freedom to do their own research and find out for themselves what lies ahead for the future. Here are some of the latest predictions to watch out for.
Cross-border payments will get faster and cheaper
One important future development that cryptocurrency experts predict is that blockchain will change how money is moved worldwide. For example, Stellar is a cryptocurrency that offers a way to make transactions at the enterprise level. Companies like IBM have partnered with Stellar to use their blockchain technology to make faster, cheaper cross-border payments. It’s no coincidence that IBM is currently one of the top cryptocurrency stocks.
Ethereum will have a bull run
Ethereum is the world’s second most popular cryptocurrency. Many investors believe it won’t be too long before Ethereum overtakes Bitcoin. The Ethereum network is currently migrating to a more energy-efficient platform. As a result, many investors are bullish on Ethereum, with predictions that the coin will reach 100,000 by 2025. More and more e-commerce platforms like Shopify accept Ethereum as payment for sales so that this prediction could be on the money.
Bitcoin will bounce back
Bitcoin was the original cryptocurrency, and it’s still the biggest. This is partly thanks to the backing of big investors like Tesla. Bitcoin had some problems this year – after reaching an all-time high of $64,000 in April, Tesla CEO Elon Musk said he had a problem with how much fossil fuel Bitcoin miners were using globally. Tesla suspended Bitcoin payments for sales, and the cryptocurrency crashed hard. However, big hedge funds like ARK Investment Management haven’t given up. ARK CEO and superstar investor Cathie Wood stated on Bloomberg TV that Bitcoin would rise to a massive $500,000. That’s because coin miners are switching to renewable energies like solar and wind. The faster this happens, the sooner Bitcoin will overcome objections based on environmental concerns.
Energy efficiency will be key
As the example of Bitcoin and Tesla shows, cryptocurrencies are coming under pressure to reduce the amount of fossil fuel they consume. From now on, investors will be increasingly sensitive to the environmental issues around cryptocurrencies. For many, the solution is to adopt cryptocurrencies that are more energy efficient. One example is Cardano, a blockchain-based cryptocurrency that is a staggering 1.6 million times more energy-efficient than Bitcoin. In the future, cryptocurrencies that use too much energy can expect to see their value drop.
Proof-of-stake coins will shine
Litecoin is a Bitcoin spinoff that works on a proof-of-stake mechanism – investors can mine or validate block transactions according to the amount of Litecoins they have. The more Litecoins, a miner, owns, the greater their mining power. The cryptocurrency was designed by Charlie Lee, an engineer at Alphabet Inc – one of the biggest investors in digital currencies. Lee designed Litecoin with a different mining algorithm from Bitcoin. As a result, Litecoin is four times faster than Bitcoin, its fees are lower, and it’s less harmful to the environment.
Cryptocurrencies will tie themselves to fiat
Companies like Mastercard have shown a lot of interest recently in Tether, a cryptocurrency that is tied to the US dollar. Because it’s tied to a stable fiat currency, Tether has a lot more price stability than some of the other cryptocurrencies out there. Compared to the wild swings that Bitcoin and Dogecoin have experienced this year, Tether seems like a safe harbor. It might even be a bit boring, but that kind of stability is what big investors like Mastercard value – and Mastercard’s cryptocurrency stock is currently top-rated.
Banks will use cryptocurrency to grow
Ripple is a strong rival to Tether, with massive investment from the National Bank of Egypt. The reason is that Egypt is one of the top five countries that receive payments from citizens in foreign countries – and Ripple offers cross-border transactions that are even cheaper than PayPal’s. This makes the bank much more efficient in reaching out to new allies in bigger markets.
The blocks in the blockchain will get bigger
One problem with Bitcoin is that it’s limited by transaction processing time. Bitcoin Cash is a Bitcoin spinoff that offers faster transaction speeds thanks to powerful chips produced by NVIDIA. This added processing power enables Bitcoin Cash to make bigger blocks in the blockchain. This makes for shorter wait times and lower transaction processing fees. The downside is that bigger blocks are less secure, so investors are likely to stick to Bitcoin until this issue is resolved.
Security will be top priority
Security is a critical consideration to investors, so cryptocurrency developers need to ensure that their new cryptocurrencies can resist attacks from outside. Many of them are turning to Polkadot for this reason. Polkadot is a network and a cryptocurrency. It’s a secure financial system that acts as a bridge between different blockchain systems. With Polkadot, cryptocurrency developers get access to security that gives them the ability to strengthen the defenses around their platforms. This makes Polkadot a desirable alternative to Bitcoin.