The year 2017 saw a great shift in the patterns of financial markets with the inclusion of cryptocurrency in them. Before the year began, the digital currency Bitcoin, which was developed in the year 2009 was still an unknown phenomenon. However, 2017 did not just turn the table for bitcoin alone, it paved the way for other coins of cryptocurrencies in the market too. Companies began accepting payments and deliveries in the form of digital currencies that led to the hike in the price of Bitcoin up to USD 30,000, this instance induced an unprecedented volatility in the currency market and traders envisioned a great future in the digital currency. It was at the same time when CBOE and CME issued licenses for cryptocurrencies to be initiated Future and Options trading on.
While the world was still witnessing a major change in the concept of cryptocurrency and the usage of it, the CEO of Square and co-founder of Twitter, Jack Dorsey mentioned in a statement that cryptocurrency or Bitcoin, singlehandedly, within a decade can become the world’s only currency. The fiscal year of 2017 was dominated by the bitcoin, this perhaps was the reason behind Dorsey’s open claim about the future of digital money. This also endorses that where bitcoin (or any other cryptocurrency) is failing to capture the consumer market, it is also becoming a major interest of the investors. The CEO opines that even if the currency doesn’t stay as a replacement for money, it sure will be used as a commodity or an asset. There has been a crypto fever that the world was persistently running in the past few years, but it seems to be wearing off and the markets are now becoming dependent on the use of cryptocurrency as a medium of investment or for trading purposes.
Goldman Sachs executive had also asserted last year that the sudden boom of the cryptocurrency, precisely Bitcoin is going to play the role of an asset or a commodity than a currency. This is the reason that the use of cryptocurrency is receding in importance as a currency to a tradeable commodity which is seeing a great volatility in its prices and contains the potential of giving its trader a great amount of profit.
The same perception that cryptocurrencies are losing their significance in value as currencies is a reflection of reality. In the previous year, the number of transactions (other than those traded) in the bitcoin, did not increase in the past few years, while other research-based studies show that the major usage of cryptocurrencies lately has been in the illegal transfer of money from one place to another.
If studied as a mode of exchange, Bitcoin happens to somewhat occupy the same place it used to earlier in the year 2010, as an alternative of the incumbent monetary system, benefitting those looking for illegal means of transactions rely on them. Another use of such currencies exists in countries highly affected by inflation, like Venezuela, that has recently launched its own cryptocurrency called “the Petro”.
However, the catch of the system, on which the entire cryptocurrency business thrives, is the concept that it’s a decentralized and unregulated means of transactions that will have the records maintained on a more robust system called blockchain. The primary attraction for the users is that this currency someway and someday can work in replacement for the fiat currency, which had begun to materialize when giants like Microsoft and WordPress started taking payments in Bitcoin. The fall in prices of bitcoin after it became a part of the Future and Options exchange show that the dream of cryptocurrency to become a substitute for fiat currency is still a question that puts the scope of cryptocurrency in the doldrums.
Besides the use of cryptocurrency as a replacement for paper money, the tomorrow of it can be vividly envisioned in the Future, Option and Forex markets. So even the system of fiat currency doesn’t adapt to cryptocurrency, the traders can generate an insane amount of profit from the volatility of the currently circulated cryptocurrencies like Ethereum, Bitcoin and more.
The future of cryptocurrencies is not bleak at all. Even if the use of it is not seen in the conventional sense of money, the doors of Option, Future and Forex, as the history is evident too, are always open for digital currencies.
Waqas Javed is a digital marketing strategist that helps companies to maximize online reach with his unparalleled outreach skills. Currently, he is serving at Fuad Ahmed Currency trading expert blog
Also published on Medium.