The crypto market would undoubtedly benefit from an influx of institutional investors, but what are the chances that cryptocurrencies can actually attract big-name investors? The cryptocurrency market requires transparent regulations, the introduction of exchange-traded funds, and more widely-applicable uses.
Challenges that the market faces
While the cryptocurrency market as a whole grew impressively in 2017, the first half of 2018 was rocky. Anxiety about frauds, cybercrime, and regulations have cast doubt on the prospects of digital currency. Investors also have concerns over the potential of market manipulation and token supplies. Another issue is the reputability of exchange platforms. While the developers of these platforms might know what they’re doing, most of them aren’t well-established experts in the finance industry. Many are younger developers who are self-taught. This does little to assuage the worries of older investors.
The possible advantages of the crypto market
One of the most promising signs is that an increasing number of well-respected financial institutions are integrating digital currencies into their operations, especially popular cryptocurrencies like Bitcoin, Ethereum, and XRP. Most recently, Goldman Sachs has announced it would begin trading Bitcoin this year.
Versatility
Investors typically benefit from diversified assets. Cryptocurrencies are a good way to branch out and broaden your portfolio. Cryptocurrencies are a unique asset because they have numerous applications and cover more industries than a conventional asset would. This versatility is one of the biggest advantages of the crypto market.
Another thing to keep in mind is that, even though the cryptocurrency market has not made as much ground in the United States, it has already made a more profound impact on the European and Asian markets. The newest crypto startups are being established in Eastern Europe and South Asia, unsurprisingly these are countries with fewer regulations. It is important to look at what innovations are taking place all around the world.
Advances in technology
Technology changes at exceptionally fast rates. Consider an exchange platform: one issue that the crypto market faces is that many of the biggest conventional trading and investing platforms have yet to integrate digital currencies. That is why so many currency exchanges have emerged in recent years that specifically cater to cryptocurrency. Many of these exchanges do not enjoy the same infrastructure that you would expect from a traditional trading platform, so they may be less safe or harder to use. However, you can expect the quality of these exchanges to improve with time and at a fairly rapid rate. Seeing the technology and the crypto market as a whole move so quickly, it is inevitable. Plus, with so many new exchanges popping up, you can expect a number of these platforms to merge either with pre-existing cryptocurrency exchanges or with traditional exchanges.
The future will show
While the cryptocurrency industry does face a number of obstacles, it wouldn’t be surprising if the market experiences an influx of investors in the future. Over time, cryptocurrencies will become more versatile, more applications will become part of everyday life, currency exchanges will become more reputable, and financial institutions will increasingly integrate cryptocurrency into their operations. As long as regulations remain clear and not overbearing, there is much to look forward to when it comes to cryptocurrency.
