Cryptocurrencies are booming on an international scale for quite some time and it remains to be seen how the future of the global financial market will be affected by this. Will these completely overthrow the traditional financial frameworks employed across the world or is it just a tide that will settle down in the coming years.
The founder of Elevated District Media, also known as ‘Nye The Crypto Guy’ on Twitter, shared his thoughts regarding the entire crypto scene. Talking to BlockPublisher about whether he thinks cryptos will replace fiat in the future, Nye stated:
No, I do not. It could work along side it though.
Nye clearly seemed to be of the view that although cryptos might not replace the already established fiat framework, they will most likely work along with it. As suggested by many experts of the game, including Thomas Power, a board member at Blockchain Industry Compliance and Regulation Association (BICRA), cryptos will probably see mixed outcomes with fiat in the coming time. Products launching in the future will most likely employ both the currency frameworks at their core. Fiat has its roots embedded deeply in the modern financial system, it would be really hard for the cryptos to overthrow it.
As of now, the crypto market itself is pretty nascent. There are a lot of issues that are associated with it including volatility, manipulation by big whales in the game, the prevalence of illegal practices, and lack of a regulatory framework. Owing to these issues, the adoption of cryptos in the financial frameworks across the globe has not been large scale. Acceptance on an official scale has also been relatively low. A crypto-linked exchange-traded fund (ETF) has not been approved by the United States Securities and Exchange Commission (SEC) as of now owing to these problems.
But just like every other technological innovation, time is needed for this market to grow. As more and more areas are explored regarding the usage of cryptocurrencies, the market will grow and mature. The culmination of illegal and manipulative activities in the market will drive it towards more acceptance in the general public. Establishment of platforms like Bakkt, which aims at giving the world a secure ecosystem for selling, buying, spending and storing cryptos, will likely result in more public and investor confidence. The approval of a crypto-linked ETF will open the doors for more institutional investment in the game. As more and more institutional starts to pour in, the market will stabilize more rapidly.
Talking to BlockPublisher regarding a crypto linked ETF getting established and its effects on the market, Nye stated:
I have no idea. It’s probably healthy for the long term.