Hello everyone! 👋
A few days ago, I published a survey for the community to decide on my next publication, and the doubt that 98% of all crypto market operators currently have won: What will happen in the coming months?
Well then. I will try to outline in detail all the points about what I believe may happen.
Before continuing, I would like to clarify 2 points.
This publication is a hypothesis, not a statement.
Before leaving a comment, I recommend reading the entire publication, and once you comment, keep in mind that just as you wish for your comment/view to be respected, respect that of others as well.
Recommendation:
Before starting to read this hypothesis, I suggest you open your mind and read this article calmly.
I invite you, when you finish reading, to share your opinion on this article and this topic.
Let's go! 😁
1. Current state of the market
Currently, we are all aware that the crypto market is largely linked to Bitcoin (BTC), and Bitcoin is currently linked to politics and the global economy, and we are also aware that the crypto market is experiencing notable volatility, even greater than usual.
Despite some cryptos like Bitcoin ($BTC ) or Ethereum ($ETH ) showing some recovery, fear in the market and institutional regulations are shaking the sector considerably. Additionally, global political and economic conflicts, recent scams in countries like Argentina, Spain, and large-scale thefts like the ByBit case cause even more instability in the market, making it more unpredictable than it usually is.
In my country (Spain) there is a saying: 'One must find the good in the bad'; this means that in everything bad, one must find something good. So, despite the difficulties, there are more investment opportunities, more interested investors... and this could be very good in the long term.
2. What do we expect in the future?
The significant increase in fear and uncertainty in the crypto market will always be a key factor, but there are more elements that can considerably influence the evolution in the coming months.
Institutional adoption: More and more companies and investment funds are interested in adding cryptocurrencies to their portfolios. This means that digital assets are gaining ground within the traditional financial system. As more banks, funds, and large institutions join the adoption of cryptos, it is likely that stability will increase and market capitalization will rise (in the long term, having suffered short-term fluctuations).
Regulation: As cryptos are increasingly seen as part of the financial sector, governments and regulatory bodies are beginning to implement regulations to provide them with a legal framework, intending to offer more security and clarity to investors (or at least they want us to see things this way), which could facilitate the general adoption of cryptocurrencies.
Technological innovation: The blockchain system, smart contracts, DeFi, interoperability between different chains... These could gradually be added, such as the Digital Euro in Europe, smart contracts for insurance. This could generate new investment options and expansion of the digital economy with the adoption of the ISO20022 standard to improve interoperability between financial and blockchain platforms.
Recovery after the fall: Despite the bearish situation in recent months, the market has experienced similar or worse drops, and the market tends to recover, but always keeping in mind the high volatility of this sector.
3. What could slow down the market?
This section is simply to raise awareness that there are possible points to consider and that not everything is so rosy, and that every action in the world of investments has its risks.
Government regulations: Excessive regulation in key countries (China) can affect the development of the industry, whether through direct bans or through regulations so high that they discourage investors.
Scalability: Despite many projects being in constant development, many blockchains are not currently equipped to handle large amounts of transactions at low cost, which could slow down mass adoption.
Lack of user information and lack of trust: Many people still do not understand what cryptocurrencies are, and when you add the high volatility of the sector...
Competition from centralized currencies (CBDCs): If governments use their own centralized digital currencies, it could limit the adoption of decentralized cryptos, despite the large differences they have in technology.
4. Key events to follow in the coming months.
The market is highly sensitive to this type of event. Let's go over some of them that, in my opinion, could influence the direction of the market in the coming months.
Important updates: The anticipated Ethereum 2.0 update promises to improve scalability and reduce energy consumption. In this event, the future of Ethereum will be decided. We must also consider the advancements in Layer 2 solutions, such as Optimism (O), Arbitrum (ARB), or Polygon (POL), designed to improve transaction efficiency, reducing costs and accelerating the adoption of cryptos.
CBDCs in central banks: An example we can take is the European Union, which plans to start using the digital Euro by the end of 2025. This could help and give a boost to the adoption of cryptos; despite being centralized, it could help boost decentralized ones.
Mass adoption by large corporations: Many companies are already experimenting with the use of cryptocurrencies for their adoption or are already starting projects or joining projects, such as the case of HBAR, which has confirmed a partnership with Nvidia and Intel.
Global economy: Countries like the United States continue to affect the market both positively and negatively, and for the rest of the year, it seems likely that it will keep altering the market significantly. Just like many countries, they are also contributing to this alteration.
5. How do macroeconomic events impact the crypto market?
Macroeconomic events have a significant impact on the crypto market, as currently, whether we like it or not, this sector is linked to the global economy. Some key points are:
Monetary policies of central banks: The decisions of banks, with the Federal Reserve of the U.S. as the main protagonist, greatly influence crypto prices. Due to interest rate hikes and the announcement that they would not be lowered, this may lead some investors to divert and focus on buying safe-haven assets. Can you guess what one of them is? Indeed, Bitcoin (BTC) and another, of course, is gold. This could lead to an increase in market value.
Inflation: Inflation increasingly affects the value of traditional currencies, so people are starting to see Bitcoin (BTC) and other altcoins as a store of value, the same system as gold.
Economic and geopolitical crises: During economic crises and geopolitical tensions, cryptocurrencies are becoming more attractive as a safer alternative to financial systems, as this way you reduce risks and do not lose what belongs to you, since you store it in a cold wallet and no one else has access.
6. What do I expect in the long term? (From my point of view).
In summary, based on current information and historical trends, I see that the market could face a consolidation phase before deciding whether to head up or down. However, key factors such as institutional adoption and technological updates could drive a bullish movement in the medium/long term if global conditions continue to evolve positively. Despite possible setbacks, the strength of cryptocurrencies in the market remains solid, leading me to believe that there could be gradual growth in the long term. However, volatility will remain a challenge, and it is always important to be prepared for any scenario.
This is my current point of view; I have more theories, but this is the one I lean towards the most now. Will it be completely wrong? Will I be right?
Thank you very much for reading; I invite you to share your opinion and even debate.
