How will the cryptocurrency market change in the next 5 years?

In 2020, we saw the rise of decentralized finance, liquidity mining, and governance tokens. In 2021, the situation has remained almost the same, with cryptocurrency prices rising, more and more people adopting cryptocurrencies, and this popular trend continues to affect the traditional economy.

It is undeniable that this trend has seriously accelerated the world's entry into the digital age. From ordering food to buying art, people are increasingly accustomed to using smartphones or laptops. So what do you think cryptocurrency will look like in the next 5 years from now?

The author has put forward three noteworthy aspects that we should focus on regarding the future of encryption.

Policy Development

As cryptocurrencies continue to enter the financial markets, policymakers and central banks are busy developing regulations to ensure the security, reliability and control of energy use of digital currencies. Although cryptocurrencies themselves are borderless, news of regulatory actions still have a strong impact on the cryptocurrency market. Regulatory talks are heating up, and the more tokens grow on the market, the more scrutiny regulators will put on it.

This is not necessarily a bad thing for stablecoins. Once regulation is completed, we will hopefully witness further large-scale migration of compliant stablecoins into traditional finance, which will power the next round of growth for DeFi.
ETF Approval

Yes, you heard it right, investment companies like Fidelity are working to get approval for cryptocurrency ETFs from the U.S. Securities and Exchange Commission. These funds can help investors diversify their investments into different tokens and can use users' traditional investment accounts. These ETFs will open the door to investors who are not as tech-savvy as millennials, but still want to learn about it.

Despite the strong likelihood of approval, wild swings in Bitcoin prices in the first few months of 2021 have reignited concerns about the risk ETF investors face from such volatility.

Keep in mind that the traditional way of owning cryptocurrencies (by investing in crypto ETFs) is not as safe as investing in the stock market. These ETFs are still as speculative as any crypto investment and are subject to high volatility.

Wider institutional adoption of cryptocurrencies

Just last week, payment giant PayPal caused a stir by announcing that it would allow their customers in the UK to buy and sell artificial currencies. In addition, some large companies such as Microsoft and Tesla have begun accepting Bitcoin as a payment tool. These are all important steps towards the mass adoption of digital currencies.

Big companies are now leading the way, giving more and more businesses the confidence to adopt cryptocurrencies, all because they are convinced that digital currencies will play an important role in the long-term trend in the consumer payments field.

In light of this, the boom in the entire crypto market has created an unprecedented financial revolution. Although they still have many obstacles to overcome before crypto technology can truly enter the mainstream market, the situation looks pretty good and exciting. With blockchain technology providing enough benefits such as anonymity and low transaction fees, the growth and adoption of the cryptocurrency market is inevitable. (Blockchain Headlines)