The digital market has been booming a global scale since the past year. More and more organizational interest is being developed regarding this market and as we move into the future and the digital market is expected to grow. As a result of this, the trading that is happening across the exchanges in the United States is expected to double up moving forwards. This view is also shared different analysts in the crypto world, who believe that the crypto trading happening across the exchanges is highly expected to boost in the near future.
Even though the digital market has shown volatility and instability, its trading on the exchanges has generally increased. It is also suggested by different analysts of the crypto world that the revenue that is generated at the exchanges through trading of cryptocurrencies will only increase moving into the future. Currently, the revenue through crypto exchanges floats around the value of $2 billion. It expected to double up to a value $4 billion by the end of this year.
Although the trend shown by cryptocurrencies since December last year has not been largely positive, the revenue generated by the exchanges through crypto trading has increased significantly. It has dropped from an all time high level of around $20,000 to a mere $5,000 level in past june and in the recent past. Since facing a drop in its value to an almost half of its peak, bitcoin has not been able to get back to the top. Other digital currencies have also faced an almost similar trend and the overall market capitalization of digital currencies has dropped below the mark of $200 billion.
The trading, buying and selling of bitcoin and other digital currencies at the exchanges have generated a revenue of approximate $2 billion at the crypto exchanges in the past year. Moving into the future, as more and more developments are made in the world of cryptocurrencies, crypto trading will further enhance the revenue generation at the exchanges. Institutional interest has been developing in the market of digital currencies at an exponential rate. But up till now, major institutional firms and organizations have held back from investing in the crypto market owing to the uncertainty that persists in it. Lack of security and persistence of fraudulent activities has also been one of the reasons institutions have held back from entering this market.
The major demand from the institutions concerning the digital market comes in the form of establishment of an exchange traded-fund (ETF) for the cryptocurrencies. This is expected to enhance the acceptance of the digital currencies across the financial market as a whole. But up till now the regulatory body, United States Securities and Exchange Commission (SEC), has not been keen on approving a crypto-linked ETF. In the recent rejection to the proposal posed forward by the Winklevoss twin, backed by Bats BZX, the commission stated that:
Although the Commission is disapproving this proposed rule change, the Commission emphasizes that its disapproval does not rest on an evaluation of whether bitcoin or blockchain technology more generally has utility or value as an innovation or an investment. Rather, the Commission is disapproving this proposed rule change because as discussed in detail below, BZX has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act Section 6(b)(5), in particular the requirement that its rules be designed to prevent fraudulent and manipulative acts and practices.
Lack of a regulatory framework is also one of the reason the SEC is not approving an ETF for the cryptocurrencies as of yet.
The Commission notes that bitcoin is still in the relatively early stages of its development and that, over time, regulated bitcoin-related markets of significant size may develop,” the document reads. “Should such markets develop, the Commission could consider whether a bitcoin ETP would based on the facts and circumstances then presented, be consistent with the requirements of the Exchange Act.
Once steps are made regarding the development of the crypto market on an official level, things are expected to get better for the digital currencies. We have seen that acceptance across the financial space is finally getting larger regarding the cryptocurrency market. One of the commissioner at the SEC even dissented the decision made by the SEC stating that SEC should not be standing in the way of technological advancements. She stated that:
The Commission’s mission historically has been, and should continue to be, to ensure that investors have the information they need to make intelligent investment decisions and that the rules of the exchange are designed to provide transparency and prevent manipulation as market participants interact with each other. The Commission steps beyond this limited role when it focuses instead on the quality and characteristics of the markets underlying a product that an exchange seeks to list.
Experts are suggesting a bright future for cryptos ahead if certain developments are made on an official scale. The co-founder of Reddit and the VC of the venture capital firm Initialized Capital, Alexis Ohanian event predicts bitcoin crossing the $20,000 mark by the end of the year. He stated that:
At the end of the year, Bitcoin will be at $20,000. And Ethereum will be at $15,000 [which he later clarified as $1,500]. Great, now people can call me out if I’m wrong.
Despite the volatility, the market as a whole is expected to grow.
As volatile as it’s been, we see it continuing [to go] up over the long term, because more and more people are going to look for alternatives to fiat as a store of value as we see currency fluctuations with states failing and other uncertainty, that makes having a digital store of value like bitcoin something that’s desirable, because you don’t have to worry about withdrawing it from a bank or the value disappearing as a government money.
In a nutshell, things are getting better for the digital currencies and in the future as more and more institutional interest will be develops, the trading at exchanges is expected to increase at a massive rate. Revenues generated at the exchanges through crypto trading aren’t going anwhere anytime soon.