The cryptocurrency space is evolving at the kind of pace one would expect from such an innovative digital asset. With new developments constantly on the horizon, these are the trends we are keeping a close eye on.
Exchange-Traded Funds
ETFs for both Bitcoin and Ethereum have launched so far in 2024, with asset management giants such as BlackRock and Grayscale amongst those who have brought ETFs to market. A host of traditional investors have taken the step into ETFs, indicating that this is a product viewed as a long-term prospect, even by some of the most cautious players.
The integration of Artificial Intelligence and Blockchain
As AI, Blockchain and the metaverse continue to interact and converge, a continual redefinition of the digital landscape is a permanent consideration. With the innovation that such an integration provokes, we are set to see many more opportunities for growth in the digital asset space.
Regulatory Developments
With an election later this year in the U.S. and cryptocurrency playing an increasingly more central role in political campaigning, we can expect to see a lot of speculation around how digital assets could be regulated. In Europe, the Markets in Crypto-Assets (MiCA) regulation is already underway, as better protections and security around digital assets is put in place. This trend should be set for a global spread in the near future.
Environmental and Sustainability Concerns
The environmental impact of cryptocurrencies is a major topic. El Salvador has started using geothermal power from a volcano to mine Bitcoin, and less energy-intensive and environmentally friendly practices around digital assets will certainly come to the fore further, especially with more governmental and regulatory involvement.
Central Bank Digital Currencies
CBDCs are another movement gaining traction, with more central banks exploring the issuance of their own digital currencies. Even the more traditional nations are exploring this, with Italy's Banking Association recently trialling two different models of wholesale CBDC across 16 banks. We can expect to see more development in this area, as banks and traditional institutions continue to evaluate digital assets in a progressive manner.
The descriptions provided about the above trends and products are all based on publicly available information, and as such cannot be considered as financial advice or encouragement to invest through them. All transactions involving digital assets involve certain risks, which you should familiarize yourself with prior to any investment.