The factors in vogue that are affecting the operations of Cryptocurrency Exchange Development Company
While it is no surprise that the investment experience in a Cryptocurrency exchange development company would be filled with speculation and volatility, certain trends are shaping the future of the industry. Though there are a huge number of stakeholders in the market such as traders, miners, investors, and exchange owners, everyone has to face the onslaught of uncertainty.
Some of the factors that are playing a major role are
Halving of mining
Every cryptocurrency miner is motivated by the rewards that he gets in the form of a specific number of crypto assets. Every four years, the rewards get halved. After two successive reductions of rewards in 2012 and 2016, the same is going to take place in 2020. Though miners might feel a bit negative about the decrease in rewards, they would be compensated by the rise in price. In 2012, the price magnified to $100 from just $10. There was a positive sentiment in 2016 when the price doubled from $400 to $800. This tends to give the conclusion that there has been a high demand for cryptocurrency. It also helps in stabilizing the supply.
The emergence of Libra
Social media giant Facebook caused a huge uproar in the market when it announced plans to launch its own digital currency. Despite massive support from other companies such as Uber and Vodafone, it faces a lot of regulatory obstacles. It has the potential to grab a huge share of the market. Libra can create a huge disruption in the market as it aims to create a standard global digital wallet. Though it aims to help the unbanked by offering world-class financial services at an affordable cost, it has run into trouble with the government. Ahead of its official launch, it could face opposition from regulatory authorities, industry watchdogs. The same model could also be replicated by other technology companies as they extend their wings to the banking industry.
Increased interference from the federal agencies
While regulatory acceptance is a must for survival of a cryptocurrency, agencies such as the IRS (Internal Revenue Service) are planning to tax digital currency transactions to make it a level playing field. Some nations such as Singapore and Switzerland are welcoming the operation of cryptocurrencies by designing friendly regulations. More clarity is needed concerning concepts such as staking and airdrops. Since digital currencies pose a huge challenge to the traditional financial markets, governments are increasingly concerned about their growing clout.
Consolidation of the market
Though there are a huge number of cryptocurrencies being added every day in the industry, very few have a strong value attached to it. Only a few coins trade a significant volume of more than $100,000 per day. New coins are developed in the market by entrepreneurs and companies by providing innovative offerings. It has received a positive buzz due to better security practices, compliance with regulatory guidelines, and more transparency. However, there exists a saturation point beyond which the creation of new coins will stop.
The entry of Cryptocurrencies into FinTech
With the proliferation of decentralized technology, transaction processing has become faster. It has improved accessibility as the records are immutable in nature. Cryptocurrency has tried its best to ensure a fair trading system and reducing incidents of discrimination. With digitization surging every day, the integration of Cryptocurrencies and FinTech can be a gamechanger. We are witnessing an increasing number of payment wallets, ATM’s catering to cryptocurrencies.
Changes in customer attitude
While holding physical currency has a lot of demerits due to its low value and high risk of getting stolen, it has been replaced by a digital wave that promotes cashless payments anywhere and anytime. This process is faster and efficient as everything can be handled with a click of a button. It has led to a huge interest from startups as well as various institutions.
Huge interests showed by governments
Though governments all around the world prefer centralization, countries like the USA, France, Russia, and UAE have already demonstrated interest in developing their own cryptocurrencies. They understand the benefits of Blockchain technology for managing huge volumes of data.
The gains offered by decentralized financing
With the need for innovation to inject freshness and energy into the system, decentralized financing has emerged as a viable alternative due to its trustless nature. It can play a major role in transforming the lending business as digital assets can soon be utilized as collateral to obtain loans. Simultaneously, it offers a better user interface and democratized access.
After analyzing the above factors, we can conclude that the cryptocurrency market will witness interesting trends at the turn of the decade. Higher adoption, friendlier regulations, and better value proposition will ensure a strong future for this growing industry. Being a stellar Cryptocurrency exchange development company, Blockchain App Factory offers reliable solutions at an affordable cost. Do reach out to our experienced developer team and get a profitable package soon.