The cryptovoltaic market had been growing rapidly for a long time until it was overshadowed by the stock market crash and massive economic turmoil. It is possible that this phase will soon be over, and many cryptovolves will continue to compete for leadership in the industry. By the way, it is the fierce competition among several projects that does not allow at least an approximate prediction of the future of the industry. Nevertheless, there are several factors that allow industry experts to almost intuitively identify market trends.
Strengthening of control
When Bitcoin first appeared in 2009, one of its main advantages was its decentralized nature and the fact that it allowed for essentially anonymous transactions. Those who appreciated these benefits from the start were free to purchase illicit goods (and sometimes services) in the darkness markets. Bitcoin was mainly distributed thanks to Silk Road, the largest darknet market at the time.
Source of illustration: BitNews
Now that cryptovalut is increasingly reaching the mainstream, government and regulatory agencies around the world, including the Securities and Exchange Commission, the Federal Bureau of Investigation, the Department of Homeland Security, and the Financial Crime Network (this is only within U.S. borders) are paying more and more attention to cryptovalut.
Control began to increase around 2013, when the Financial Crime Network first issued a regulation, effectively equating cryptographic exchanges with financial services entities. This meant that exchanges had to be subject to mandatory government regulation.
The Department of Homeland Security soon followed this decision by freezing the accounts of the then largest Bitcoin Mt. Gox Exchange for fear of money laundering.
This led to the April 2017 rejection by the Securities and Exchange Commission (SEC) of an application for approval of the first ever Bitcoin-ETF (Exchange Traded Fund or « Stock Exchange Investment Fund »). As a result, the price of Bitcoin began to fall sharply, although this period did not last long. Since then, the commission has rejected orders from different companies several times, referring to the fact that the market is still too volatile and largely subject to manipulations. To some extent, this has put the cryptovolves in an extremely embarrassing position: government control and regulation have started to increase, which is in fact at odds with the reasons why the cryptovolves were mainly developed.
In addition, although the number of regular users is increasing day by day, the acceptance rate is still negligible. If regulatory and censorship problems are not addressed before the mass adoption of the cryptovite, it will be much more difficult, if not impossible, to address these problems later.
In order for cryptovalue to achieve true proliferation and become part of the current financial system, it must continue to meet its original purpose, while maintaining the level of protocol security at the same level or even higher.
On the other hand, it must eventually become simple and intuitive for everyone to understand. We must also not forget the necessary level of decentralization inherent in the nature of Bitcoin by its creator Satoshi Nakamoto. However, mechanisms for checking and preventing dubious activities, whether tax evasion or money laundering, should be worked out. These elements cannot be left unchecked.
But that means that the crypt currencies of the future may be more a symbiosis of their current form with more traditional types of fiat currencies.
Government oversight.
The situation in the USA
While the U.S. is actively researching and identifying ways to use Bitcoins as a means of money laundering or as a way to finance illegal activities, it is also planning to release its own form of cryptographic currency. This would likely allow them to take advantage of digital money - or full-fledged cryptov currencies - while at the same time controlling the potential risks of illegal activity.
In fact, all the government needs to do is create its own closed (aka private) block-office, and run the government's crypt currency on it.
You can back it up with a 1:1 U.S. dollar and set up fast and free exchange systems. The only significant difference between the state and other crypt-currencies existing today is that only one user, the government, can create blocks in a block-box and check/confirm transactions. In addition, they will have carte blanche to roll back and freeze transactions in the blockage, which will counteract the financing of illegal activities.
This can be done even by simply simulating the Bitcoin or Etherium protocol, then adjusting the reward for block mining based on their own needs. That would make it possible
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