With the introduction of Bitcoin in 2009, digital currency transitioned from a philosophical idea to (virtual) reality. While Bitcoin grew in popularity over the following years, it garnered considerable investor and media interest in April 2013 when it crested at a historic $266 per bitcoin after a tenfold increase in the previous two months through the help of different online platforms like orbi.network.
At its peak, Cryptocurrency had a market capitalization of more than $2 billion. Still, a subsequent 50% decline ignited a heated discussion over the coming years of cryptocurrencies overall, and Bitcoin in specific.
According to some economists, a sea shift in the cryptocurrency industry is imminent as corporate money joins the market.
Furthermore, there is a possibility that Cryptocurrency may be registered on the Nasdaq, lending greater credibility to blockchain innovation and its potential as a replacement for conventional currencies. According to some, all cryptocurrency need is a certified alternative investment fund (ETF).
While an ETF would undoubtedly make it simpler for individuals to invest in Bitcoin, there must still be a desire for crypto, which may not be created automatically by a fund.
Bitcoin’s Future Prospects
What will be more challenging to overcome is the underlying contradiction that cryptocurrencies face — the more successful they grow, the more legislation and regulatory inspection they are likely to generate, eroding the core basis for their existence.
While the number of businesses accepting Cryptocurrency has increased, they remain a small percentage. To become more extensively utilized, cryptocurrencies must first acquire broad consumer acceptability. However, their considerable complexity compared to traditional currencies will likely discourage most people, except the technologically savvy.
A digital currency that wishes to join the conventional financial sector need to meet many requirements. It would need to be computationally intensive (to avoid misconduct and malicious code) but simple to understand by consumers; decentralized but with appropriate financing safeguards and safety; and maintain data confidentiality without acting as a gateway for tax evasion, financial fraud, or other illegal dealings.
Increasing the Level of Scrutiny
Bitcoin’s primary advantages of decentralization and transaction secrecy have also made it a preferred currency for various illicit operations such as financial fraud, drug trafficking, smuggling, and arms acquisition.
FinCEN published regulations in March 2013 that classified virtual currency trades and operators as money service companies, thus putting them under federal supervision. In May 2013, the DHS blocked an account at Wells Fargo owned by Mt. Gox — the world’s biggest Payment processor – because it violated anti-money laundering regulations.
And in August, the New York Financial services Commission sent subpoenas to 22 developing payment firms, the majority of which dealt in Bitcoin, seeking information on their anti-money laundering and consumer protection procedures.