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  Following the ultimate crash of Terra Luna in May and the ongoing bankruptcy of FTX which began in November and the devastating effects it had on various crypto exchanges across the world, millions of traders are apprehensive about the future of cryptocurrency.
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For instance, the collapse of FTX, caused by a liquidity crisis of the company’s token, FTT, catalyzed its bankruptcy. Crypto aficionados who traded various coins on FTX-linked platforms have been unable to withdraw their investments while crypto startups are facing their own losses. In Nigerian, the web3 startup Nestcoin led by former Binance Labs director Yele Bademosi acknowledged being affected by FTX’s downfall leading to a massive layoff of employees at Nestcoin. According to Bademosi,
“Last week’s events have had an impact on us, as we held our assets (cash and stablecoins) at FTX. As a company, we have to adjust our plans, rethink our strategy…Unfortunately, this means saying goodbye to some of our very talented Nesters,”
The future of cryptocurrency is highly uncertain, as it is still a somewhat nascent and volatile market. The truth remains, whether we choose to believe it or not, cryptocurrency has come to stay. Therefore, traders, as well as observers, are keen on knowing the future of cryptocurrency technology. Should we see crypto as another bubble or fluke or something we can reshape and redefine? In this article, I highlight a few key things that people should know about the potential future of this technology.

  • Increased Mainstream Adoption

One of the biggest impediments to the widespread adoption of cryptocurrency is the fact that it is not yet widely understood or accepted by the general public. Regardless, as more and more people become familiar with the technology and its potential benefits, it is likely that we will see increased adoption of cryptocurrency in the mainstream. This could be driven by a number of factors, including the increasing use of cryptocurrency by businesses, the development of more user-friendly wallets and exchanges, and the introduction of regulations that make it easier for people to use cryptocurrency.
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  • Advancement In New Technologies

Another key factor that could shape the future of cryptocurrency is the development of new technologies. For example, the rise of blockchain technology has already had a major impact on the cryptocurrency market, and it is likely that we will see further developments in this area that could make cryptocurrency even more secure, efficient, and useful. This could include the development of new consensus algorithms, more advanced encryption techniques, and improved methods for verifying transactions.

  • Regulatory Challenges

Cryptocurrency has faced a number of regulatory challenges, both in the United States and Nigeria and elsewhere across the globe. These challenges have often stemmed from a lack of understanding about the technology and its potential uses, as well as concerns about its potential for illegal activity. In the future, we will likely see greater regulatory clarity and consistency, which could help to address some of these challenges and make it easier for people to use cryptocurrency.

  • Increased Competition

The cryptocurrency market is already highly competitive, with a large number of different coins and tokens vying for market share. In the future, it is likely that we will see even more competition, as new entrants to the market try to offer unique value propositions and gain a foothold in the industry. This could lead to a shakeout of weaker players, as well as increased innovation and improved user experiences.
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  • Greater Institutional Involvement

Despite the current volatility of the cryptocurrency market, it is already attracting the attention of major financial institutions. In the future, we will likely see even greater institutional involvement in the cryptocurrency market, as more and more companies look to capitalize on the potential of this technology. This could include the development of new financial products and services, as well as increased investment in cryptocurrency-related startups and projects.

  • Global Economic Uncertainty

The fate of cryptocurrency is closely tied to the global economy. In times of economic uncertainty, investors often flock to safe-haven assets like gold and government bonds, which could lead to increased demand for cryptocurrency. On the other hand, if the global economy recovers and becomes more stable, this could lead to decreased demand for cryptocurrency. Overall, the future of cryptocurrency will likely be influenced by a wide range of economic, technological, and regulatory factors. Featured Image Source: CNBC
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This article was first published on 21st December 2022

nnaemeka-emmanuel

Nnaemeka is an academic scholar with a degree in History and International Studies from the University of Nigeria, Nsukka. He is also a creative writer, content creator, storyteller, and social analyst.

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