Cryptocurrency excitement has gripped the financial world for over a decade now. Over that time, it evolved from a fringe opportunity to a core part of many investment strategies.
As cryptocurrency use expands in mainstream investing and financial media consciousness, trends involving its various forms grow in importance. Savvy financial professionals and those who aspire to the job, from those with decades of experience to new hires still undergoing NFA Series 3 test prep, should never miss an opportunity to learn about new options.
For those professionals looking into cryptocurrency, here are some trends to watch.
Some state legislatures have taken the initiative in crafting cryptocurrency regulation that creates a stable structure. These laws encourage investment by distinguishing digital assets into categories and creating a digital currency-friendly investing environment.
After Wyoming pioneered these laws and found success and growth, several states have launched their own efforts.
We expect to see growth across the country as states increasingly embrace cryptocurrencies
In May, Bitcoin is expected to cut in half the number of bitcoins rewarded when you mine a block in the digital ledger. It will shrink to 6.25 from 12.5.
Previous halvings in 2012 and 2016 resulted in substantial gains in the value of the currency. Though no one can guarantee that the third halving will produce similar results, past performance and the current economy indicate this could provide outstanding opportunities.
Halving serves as an effective way to introduce scarcity into the marketplace. This also is a measure meant to let the price of Bitcoin reflect the increased demand.
Cybercriminals and terrorists have elevated stealing data and money from unsuspecting people and organizations into an art form. The United States government, the European Union, and others have installed programs and laws designed to protect customers from breaches.
The private sector, led by Ernst and Young, has also taken aim at cybercrime. Their Nightfall program specifically protects private transactions using cryptocurrencies
Libra serves as Facebook’s attempt to establish a stablecoin currency. This type of cryptocurrency combines the flexibility of crypto with the backing enjoyed by traditional money.
Despite the backing of one of the world’s most recognized tech companies, established firms such as MasterCard have declined to sign on. That said, it has a potential market of over 170 million users.
If all goes as anticipated, Facebook will launch Libra in the summer of this year. Some experts believe that stablecoin, despite some reservations, will enhance the legitimacy of the concept of cryptocurrencies.
Moving from the periphery toward the center of the financial world creates opportunities, but also calls for oversight. The federal government has even started studying a digital version of the current currency.
Facebook’s entry into cryptocurrency will bring scrutiny as never before. Politically controversial, but often misunderstood, it will serve as a lightning rod for regulatory efforts.
So far, internationally, most efforts toward regulation have geared themselves toward ensuring that governments get their share of taxes. Heightened political volatility in key countries, however, may make regulatory efforts unpredictable.
Learn more about how cryptocurrencies can provide opportunities for investors going forward. Our expert staff can answer any questions on the topic and also schedule you for one of our informative courses on the topic. As cryptocurrency takes its place alongside traditional monetary systems, understanding it will only grow more vital.
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