The world of cryptocurrencies is not only dynamic in terms of listing, but also in terms of news. Despite the fact that new digital currencies or investment options through NFTs (non-fungible tokens) emerge daily, the market itself needs to mature: governments, companies and even final consumers are overwhelmed by the potential opportunities that this market promises.

The first disruption occurs based on how virtual money is perceived: unlike what happens with physical currencies, cryptocurrency is not yet much used as an exchange, but fundamentally as an investment tool. Although it is true that in some countries with unstable currencies, people tend to take refuge in solid currencies to save, this represents a global novelty: people accumulate cryptocurrencies, try to acquire them when the price is accessible and sell them when there is a price peak.

But this is only the beginning. Where is the crypto market heading? What are the necessary elements to massively increase its use?

Less volatility?

The first step is the need for greater price stability. If changes in values continue to be so abrupt with price jumps in mere hours, users will continue to resist paying for goods and services with their cryptocurrencies, while businesses and organizations will avoid charging in these virtual currencies for the same reason. A company with production costs for a given item that sells it in cryptocurrencies just at a time of steep devaluation could even lose its ability to continue manufacturing it.

In this sense, stablecoins could gain prominence: digital currencies underpinned by some element of the real economy, which can be both a physical currency and the value of a certain grain or oil. By their very conception, stablecoins stay within predictable price ranges.

An NFT, on the other hand, is a unique and unrepeatable piece that cannot be hacked or manipulated: a photo, a video, an image, a piece of music or a collector’s item. Its commercialization grows day by day but, as happens with cryptocurrencies without support in the real economy, its price is a mystery.

Companies and banks

Beyond the difficulties with volatility, as cryptocurrencies consolidate in the market, companies begin to evaluate them as a way to differentiate themselves from their competitors: in short, all those who first prepare to pay and collect with virtual currencies will enable a fluid exchange with customers and suppliers and will open up the possibility of winning customers from younger generations. Another option that some organizations are evaluating, is to pay part of their employees’ salaries in cryptocurrencies as part of their staff benefits package.

The metaverse could in turn become another important gateway for cryptocurrencies to finally start being accepted by companies. This world, which combines the virtual and the real through technologies such as augmented reality and artificial intelligence, and which allows a user to walk through alternative worlds and make purchases there, has cryptocurrencies and NFTs as its main exchange assets in its first developments. Companies that want to participate in the metaverse will need to start accepting cryptocurrencies.

Financial institutions are not immune to this phenomenon: although fintechs took the lead in developing products and services linked to the crypto universe, traditional entities are analyzing how to participate in the business. When they manage to define efficient and profitable models, they will surely contribute to the spread of these virtual currencies. It is even considered that it could be the starting point for greater financial inclusion.

The tech industry is also making a contribution: the more developers are working on simple solutions, one-click wallets or security tools that ensure the reliability of transactions to the extreme, the greater the adoption.

The role of the states

Even the states are launching their own virtual currencies: first they evaluated and tested it in small countries, such as the Marshall Islands in Oceania or Saint Kitts and Nevis in the Caribbean, but today it is on the analysis table of giants such as China, Sweden or the European Union.

Beyond that, from the point of view of governments, the main challenge for the future of cryptocurrencies is related to regulations: the governments of the world have so far failed to reach any type of consensus regarding their treatment. In large part, the success of virtual currencies among individuals lies in this lack of control. Beyond the misunderstandings and the association in the popular ideology of cryptocurrencies with illegal activities, the reality is that it is a perfectly legal activity. In fact, the idea that these are anonymous operations is far from reality: the blockchain technology itself allows end-to-end tracking in the event of a legal complaint or suspicious activity.

The market is evolving at great speed. In the meantime, users do the most important thing: check daily the prices of the cryptocurrencies they hold, rejoice with the rises, and hope for the reversal of the falls.