As the world becomes more globalized today, the popularity of cryptocurrencies rises daily because it’s the best way for people in one country to do business with people in another. Years ago it was necessary to use third party websites to transact money because most of the financial companies blocked transactions occurring overseas but now thanks to cryptos the process of transacting money is much easier as people can exchange money digitally with this decentralized form of money and as a result, according to the statistics today’s crypto market is pretty much thriving.
Using cryptos has so many advantages, especially for those who trade online, that it’s hard to resist the temptation not to use cryptos when given the opportunity. Specifically, it’s a great way to conduct international financial transactions online because while using cryptos the government and other financial institutions can’t interfere. Therefore, with cryptocurrencies like bitcoin, you can conduct peer-to-peer transactions without approval from any external source. Also, crypto users don’t have to pay high transaction fees for international transactions and they are provided with autonomy which means they are the ones who control how they spend their money without some authorities like a bank or a government. Besides, cryptos are not linked with personal identity and are anonymous in most cases unlike some traditional forms of payment.
However, there’s always a downside and cryptos also have lots of disadvantages. Despite the current tendency of actively using cryptos, many things could negatively affect the popularity of cryptocurrencies which may result in decreasing the number of people using them in the future and cause low confidence in cryptos.
Cryptos stabilize and stop being so volatile
Although sometimes volatility is described as something undesirable, generally when it comes to cryptos investors take great advantage of the volatility of the crypto market. One of the things that made cryptos so popular was the high level of volatility but now the situation changes in this case as well and cryptos start to stabilize. It means that the values of cryptos can instantly change over a small period of time. It is right that high volatility may sometimes be harmful as it means higher risk but also, the speed of changes in prices may be beneficial for investors because during these times the possibility to make more money in a short time is higher.
Traders can take advantage of the volatile markets if they set short-term plans and strategies, but today there is a tendency of decreasing volatility which may become a big threat to the confidence of cryptocurrencies.
The government takes control of cryptos
First of all, although cryptos are generally regarded as completely independent from the authorities, today the situation is a little bit more complicated. Years ago when these digital currencies were first introduced, the crypto market was not regulated by the government, and making transactions in bitcoin or other cryptos was completely illegal. Now many countries have legalized using cryptos but as a result, it may lose popularity because as we mentioned, one of the most attractive things for its users was that authorities couldn’t regulate crypto transactions.
But now government regulation may affect bitcoin prices because, in those countries where digital currencies are regulated, the government is the one who determines its price and not the supply or the demand of the market. For example, most of the forex brokers suggest that regulations usually suppress the trading values of cryptocurrencies, and as a result, as you can see on fx brokers reviews on this website many of them don’t use cryptos anymore as a payment method because today markets become more and more unpredictable. This is why taking control of cryptocurrencies by the government may be an irritating factor for the popularity of these digital currencies.
Market shares become equally distributed
Another reason why cryptos may lose popularity can be the possibility of the market shares to become equally distributed. Market share is the full amount of sales of a given company which is estimated by taking the sales of this firm over some time and dividing it by the total sales of the industry in this period. It’s the main indicator of the competitiveness of the market which is important to identify the major trends in the behavior of the customers. But doing so investors can see the potential of their possible customers and predict the benefit.
But it’s important to mention that profits are not equally distributed in the market as there are different sectors in the market. If customers use cryptos more frequently than other currencies, then they should be profitable for the crypto market and not other markets but as the government tries to take control of the financial market as a whole, cryptocurrencies may face some dangers. This is one of the factors that often concern users when it comes to using cryptos and if something like this happens, the confidence in cryptos may decrease.
Bottom Line
But as for now, crypto users have nothing to worry about because even with the possible dangers and disadvantages, using cryptocurrencies is the best choice nowadays to make safe transactions. This is why the number of companies accepting cryptos rises every day and generally speaking, the crypto market today is more popular than it had been years ago. The reason for this may be the tendency of the world’s leading industries to become digitized. Although new digital currencies are entering the market such as the digital euro and digital yuan, it’s unlikely that cryptos will use popularity anytime soon.
