The future of cryptocurrencies like Bitcoin, Ether and Co.
Investors can be a bit more confident in 2023. Prices such as bitcoin could improve a bit. Nevertheless, situation is not relaxed and extremely uncertain. However, the economic and political situation is making investors around the world nervous. Of course, the question is whether cryptocurrencies will be able to perform in the future, as they have in the past. We, the Nullfocus team, want to provide some clarity and give some perspective.
First, let’s look at the prices of cryptocurrencies for the current year. Bitcoin has gained about 50 percent since the beginning of the year (on August 28, 2023). That should be a positive sign. Nevertheless, it should be kept in mind that the numbers used to compare the record price are rather low. The reality is this: the current rate is just under 26,000 US dollars. The last record was almost 2 years ago in 2021, when Bitcoin was still worth 65,000 US dollars. The largest cryptocurrency has lost around 60 percent of its value.
This year, however, many discussions took place. Especially in the USA, the court proceedings between the SEC (United States Securities and Exchange Commission) and Ripple caused a stir. The Securities and Exchange Commission presented a list of altcoins that it considers to be securities. The consequences could be serious for Ripple and Co. if the SEC could enforce the arguments. However, the court hearing fortunately ended positively for Ripple and the altcoins, which are ultimately not considered to be securities.
Under these circumstances, investors are rightly wondering which cryptocurrencies will be successful in the future. We want to tell you the most important developments of the biggest cryptocurrencies. Also, we are interested to see what the future picture might look like by 2030.
Interested about the blockchain technology of cryptocurrencies? Read more in our article!
The biggest player: Can Bitcoin continue to perform?
The undisputed number one in the crypto industry is the most talked about currency. It is the oldest, largest and also the most valuable among all. With its proof-of-work mechanism for validating transactions on the blockchain, the currency has undoubtedly gained a reputation as a climate pest in recent years. The mining as well as the sending of Bitcoins is extremely resource-intensive. Back when the cryptocurrency appeared in 2009, this was not yet a problem. In the meantime, there is competition that promises an efficient and environmentally friendly mechanism. Thus, it is the case that in real applications, Bitcoin has already been overtaken by Ethereum, Solana, Cardano and other coins.
However, there are proponents of Bitcoin’s proof-of-work technology. They argue that this mechanism enables true decentralization. With proof-of-stake, the cryptocurrency is centralized with a few users instead. For example, Ethereum and other cryptocurrencies are issued by foundations or corporations. They hold a relevant amount of coins in circulation and therefore have a more significant influence regarding the future of cryptocurrencies.
We wonder if Bitcoin is the cryptocurrency of the future? That will depend on how the financial system develops. If the financial institutions are willing to decentralize the currency, Bitcoin is the only major accepted cryptocurrency that meets this standard. However, another option will be to integrate blockchain technology into the already existing financial system. That’s where cryptocurrencies like Ethereum and Co. with smart contracts could lead the way. If this were the case, Bitcoin with its rather slow system could have a difficult future.
Can stablecoins take over future payments?
The idea of decentralized payments increasingly adopt stablecoins, which provide stability and efficiency in financial transactions. It is important to note that the issuer holds the reserves of the real stablecoins in the corresponding fiat currency. This allows the stablecoin rate to remain stable. The well-known stablecoins currently are Tether (USDT) USD Coin (USDC).
We see decentralized financial applications (DeFi) playing an increasingly important role in the cryptocurrency industry. The DeFi platforms are relevant for financial services such as lending, liquidity fluctuations and trading, which doesn’t need intermediaries (e.g. bank). Thus, Tether or USD Coin could continue to play an important role. Whether this will remain so in the future is questionable, because these are less interesting for investors – because of their volatility.
Ripple (XRP): the new SWIFT system?
The Ripple protocol intends to change the future of the global transaction network. The developers want to establish a worldwide digital decentralized transfer system. This enables secure and fast transactions. However, we should know that Ripple isn’t based on blockchain technology, although it’s one of the cryptocurrencies. Ripple processes transactions through independent validation servers operated by banks, institutions, or individuals. Open source is used as the protocol, which banks can easily adapt for their purposes. However, Ripple currently has to deal with a lawsuit: The SEC judges Ripple and other altcoins to be classified as securities. However, the lawsuit remains unsuccessful so far. After the successful dispute with the SEC, the price of XRP exploded at times and was up 70 percent!
Smart Contracts: What about Ethereum, Cardano and Solana?
With smart contracts, Ethereum and Co. have an important technology that makes it possible to automatically create payment agreements on the blockchain. When two parties exchange money for a service, a contract is created on the blockchain. If the obligations are not fulfilled, lawsuits are the result. The majority of these goods/services and money exchanges are governed by these contracts. This also includes rental contracts, credit agreements or insurance policies. Smart contracts achieve great efficiency gains through their use.
This mechanism is at the heart of Ethereum, Solana (SOL) or even Cardano (ADA). In the end, of course, the question is which cryptocurrency will succeed. A major influence here is the development of the financial industry. An integration of this smart contracts technology could make these cryptocurrencies the champion. The technology is definitely more advanced and efficient than Bitcoin, for example. Also relevant is the current lawsuit by the SEC (like Ripple). If Cardano, Solana and other altcoins qualify as securities, this could fundamentally change the crypto market.
You want to know more about Cardano? Then read our article!
Which cryptocurrencies will survive in 2030?
To clarify in advance: There is no clear-cut answer. Nevertheless, we can venture a prognosis. Blockchain technology is a big player and will probably continue to gain importance in the future. Cryptocurrencies have already arrived in the financial world, but also in the everyday lives of many people. Nevertheless, public institutions need to integrate Bitcoin and Co. more and become more integrated into the system. For this, politics would have to deal with this topic further. We therefore assume that there will be many relevant cryptocurrencies in 2030. However, we want to emphasise that this doesn’t mean that the hype will remain as strong as it’s today. It is therefore not possible to venture a forecast as to whether the prices will continue to rise.
The hope of making a quick profit from cryptocurrencies will remain. But for that to be the case, demand would have to rise even further. However, we also see that political and economic situations can strongly influence cryptocurrencies, as is currently the case. For example, the considerations to regulate cryptocurrencies worldwide. Or the current high inflation is creating negative mood. However, other developments also give positive signals. El Salvador, for example, introduced bitcoin as an official means of payment. Will other countries join in?
Ultimately, an investment in cryptocurrencies remains speculative. There will also be some influences in the future that will drive the value of these currencies up or down. So there will always be so-called bearish (like now) or bullish periods. The investor just has to be clear when such phases prevail and take advantage of them.
Note: It is important to note that this content is not intended to provide recommendations for investments. The Nullfocus Media Team adheres to factual information and advice. No liability is therefore accepted for losses.
