The growth of the cryptocurrency market can’t be dismissed as a trend or fluke in the investment industry. In fact, a lot of people already tried to do that. We now know that the crypto boom is here to stay and there’s still plenty of opportunity to get involved.
That said, an interesting aspect of the crypto world is that trends seem to dominate the way investors approach these currencies in real time. Rather than seeing some strategies and approaches develop over time, new and emerging tactics for mastering the crypto market are happening every day. Here are the seven trends that will certainly change the crypto world in 2021 and beyond.
Tax Regulations are Coming
Despite cryptocurrency being touted as a person-to-person way to exchange goods and services, we do exist in countries with tax systems. A few years ago, many leaders didn’t even know what cryptocurrency was. Now, they’re monitoring things like Dogecoin price and looking into what regulations can be placed on the market. While some countries like India are eager to get moving on taxation quicker than others, don’t think for a second that tax regulations aren’t on the way for every nation in which cryptocurrency is experiencing frequent trading.
Cryptocurrency is currently taxed as property in the United States, meaning it receives the normal treatment of any capital asset. What many believe is coming for the U.S. and other countries is an additional tax on trades that mirrors other types of investments. The arrival of further taxes on crypto aren’t a matter of “if” but “when.”
Offshore Accounts for Crypto? They’re Likely
Let’s hop back to taxes really quickly. When we think of offshore accounts, we usually imagine the practice as something people with old money rely on to get by tax regulations in their home countries. Well, that’s likely going to be a trend as taxation arrives to many countries, but not all.
Offshore crypto havens could easily arise in places where we already see little to no taxation placed on storing money in a country’s banks. While we don’t necessarily know where these places will emerge first, the usual suspects like Korea, Japan, and Switzerland are likely.
The Volatility of the Market Will Continue to Ebb and Flow
When you think of cryptocurrency, you likely think of it as the Wild Wild West of investing. It sort of seems like anything can happen at any minute. That’s not necessarily wrong, but it is finding its footing as more major businesses and financial companies recognize crypto as a valid currency.
Here’s what makes cryptocurrency volatile: we don’t know much about these markets. While things like Etherum and Bitcoin are slowly becoming household names, there are countless other coins that we don’t know anything about. That makes investing in them risky, so don’t forget to keep a steady investing strategy at the heart of your activity.
Risk Assessment Will Improve
As many crypto investors know, the ability to assess risks involved in crypto investments is not all that accurate today. It’s getting better though, which means we’ll soon be able to make better, more sound decisions when it comes to spotting new booming currencies.
When it comes to risk assessment in the cryptocurrency world, it’s tricky to monitor every element of each individual currency. That said, if you do plan on investing in an unproven crypto, make sure you know its history, the trends of its price, and even the technical aspects of its blockchain, code, and other related infrastructures.
A Crypto Crisis is All But Certain
Given the rise in people knowing about cryptocurrency, it’s all but certain that a crisis is coming to this new and exciting market. Because of the lack of regulation on these markets as well as the increased risk for data breaches, electricity consumption, and other concerns related to crypto trading, many analysts believe the next economic crash will involve crypto.
How can you protect yourself as a crypto investor? Make sure you never put all of your investments into crypto or one industry. Diversify, stay cautious and informed, and you should be clear of any major catastrophe.
Transaction Costs Will Rise
With more people getting into the world of crypto, we’re going to see a rise in the price of making transactions.
Popular trading apps and services will slowly begin to increase their percentage for transactions to maximize profits as crypto investors continue to pour more money into the market. It’s just how it goes, so be ready for it.
New Heights are Always Around the Corner
Lastly, the best trend in crypto that won’t change in 2021 or any time after is the promise this market brings to the investment world.
There’s so much hope surrounding the way crypto can transform the way we think about making investments. Hold on tight, stay educated on the latest trends, and you could be a winner in this increasingly profitable crypto world.