In the last year, Bitcoin experienced a rising price fluctuation several times, followed by a sharp drop. Ethereum, the second largest digital currency, reached its highest value late last year. 

The growing trend in the value of these two popular cryptocurrencies has made the authorities of some countries, such as the United States, interested in adopting new regulations to monitor digital currencies closely.

Interestingly, during this period, and despite the news about the sharp fall in the price of some digital currencies such as Luna, people are still interested in investing in the digital currency market.

Big investors and the general public are equally attracted to the world of digital currencies, and the greats of the technology world, such as Elon Musk, have declared their interest in cryptocurrencies. Dave Ebner, CEO of Gemini, one of the largest exchanges in the field of digital currencies, says about this:

“In many ways, 2021 was a brilliant year for digital currencies, as many transactions took place this year, and some users and Commercial companies conducted their transactions through digital currencies.

However, the crypto industry is still in its infancy and has a long way to go to evolve; The proof of this is the stunning increase in the value of digital currencies and their sharp drop.

This issue has caused governments to think about developing regulations so that those interested in investing in the world of digital currencies do not lose their capital at once. In a situation where it is impossible to accurately predict what will happen in this field, in this article, we will examine the opinion of leading experts in the field of cryptocurrencies and their predictions regarding the future of digital currencies.

Regulations of digital currencies

The news published in the news media indicates that the review of the digital currency situation and the development of digital currency regulations are on the agenda of some governments. Lawmakers are trying to pass laws and guidelines to make investing in digital currencies safer so that cybercriminals can’t easily steal investors’ assets. They are trying to pass specific rules related to stablecoin.

Jeffery Wang, CEO of the Canadian crypto finance company Amber Group, says: “Law enforcement is one of the most influential institutions in the cryptocurrency industry in the world. We welcome clear rules.”

Jerome Powell, the head of the Federal Reserve Chair, said in this regard:

“There is no decision to ban the trading of digital currencies like Ethereum in the United States.” Meanwhile, Gary Gensler, the head of the country’s Securities and Exchange Commission, comments on the need for the severe entry of this organization and related commissions into the world of digital currencies.

At first, Mr. Gensler had optimistic opinions about the future of cryptocurrencies. He believed that digital currencies would bring about a significant transformation in the economy and financial affairs. Still, a little later, he changed his position and announced that if stricter laws did not formulate, investors in this field would suffer losses. They will experience greatness.

Additionally, the U.S. Internal Revenue Service (IRS) is interested in forcing investors to record details of their cryptocurrency transactions when filing tax returns. The statements of Mr. Gensler and Powell are in line with the views of people who believe that the field of digital currencies needs more strict regulation and supervision.

However, there are problems with adopting laws related to digital currencies. “There are different organizations that may or may not have the authority to oversee everything,” Mr. Wang said. Since companies and investors are currently operating without clear guidelines, clear rules mean removing some doubts related to digital currencies and paving the way for closer supervision of this area. Today, companies and investors operate in this area without clear guidelines, which is not a very interesting approach. For example, if a person loses his assets, the legislators can hardly support him.

Bitcoin transaction fees will remove gradually.

In an exciting move, the Binance exchange removed the fees for Bitcoin transactions. So it doesn’t charge U.S. users any fees to buy and sell bitcoins with dollars. Accordingly, no fees are charged for Bitcoin transactions with Tether (USDT), USDC, and BUSD currency pairs. BinanceUS CEO Brian Schroeder tweeted that BinanceUS will become the first crypto exchange in the United States to eliminate Bitcoin transaction fees for all users. To be more precise, this exchange will not receive any profit in carrying out transactions.

“We see this change as an opportunity to revolutionize the way we make payments and increase access to digital currencies,” he tweeted. And we welcome better support from the market and customers.”

The Raible NFT market has also recently published a post announcing that it will reduce the commission it receives from transactions to support its users, and it seems that it has reduced the commission for buying or selling NFT to 1% for buyers and sellers; The fee that used to be 2.5% for both parties. The Bitcoin payment application Strike followed a similar pattern last year by reducing its Bitcoin purchase commission to 0.3%.

How will the new regulations affect the world of digital currencies and investors?

Adopting new laws has good benefits for investors, but it challenges activists in this field. For example, a law passed in the United States a few months ago includes cryptocurrency tax reporting provisions that could simplify the process of tracking cryptocurrency activities by agencies like the IRS.

Before the new law’s approval, exchanges and companies in this field announced to the owners of digital currencies that they would keep a record of any profit or loss from investing in cryptocurrencies.

Additionally, the new rules will make it easier for individuals to report cryptocurrency transactions accurately. “Exchanges must send 1099-B tax forms to investors along with basic information,” says Shahan Chandrasekhara, director of the tax strategy at cryptocurrency tax software maker CoinTracker.io. This issue makes preparing virtual currency tax declarations simple and the method of dealing with tax cases in a shorter time.

However, adopting such regulations may negatively affect the price of digital currencies and cause their instability. One of the reasons for the volatility of the digital currency market is the adoption of such laws.

That is why investment experts recommend that you invest only 5% of your total assets in digital currencies and never invest all of your support so that if you suffer, you will not face a severe problem.

Digital currency ETF approval

Currently, significant development has taken place in the field of digital currencies. With the approval of the first bitcoin tradable fund on the New York Stock Exchange in October 2021, a significant development occurred in the digital currency industry. BITO Bitcoin tradable fund has made it possible to buy digital currency directly from brokers. This incident indicates a new and legal path in digital currency investment.

BITO Bitcoin ETF allows investors to directly use the services of traditional investment brokerages they have been associated with to buy and sell digital currency. It’s A market that may attract people’s attention. In his speech at the Aspen Security Forum held recently, Mr. Gensler indicated that we would do this in the stock and bond markets.

Some experts believe that it is true that the BITO fund is connected to Bitcoin, but since no Bitcoin is directly held in it, it may not be popular with the general public.

This fund holds BTC futures. Although Bitcoin futures follow the general market trend, experts believe there is a possibility of not following the actual price of this digital currency. (Futures bonds or transactions refer to future transactions.

The general process of the above transactions is that the buyer and seller agree to trade Bitcoin in the future and sign a contract with each other that this transaction will be each other at a specific time in the future. Therefore, both parties must remain fully committed to this contract. To be more precise, must fully implement all the details of the futures contract .)

What does the confirmation message of the Bitcoin exchange fund ETF mean for investors?

It’s too early to tell how many investors in the U.S. and abroad will embrace the BITO fund, but the ETF broke records for the fastest fundraising and the highest trading rate in its first week of operation.

The more crypto assets are available, the more people will influence the cryptocurrency world. Therefore, you can add the desired money directly to your brokerage portfolio instead of spending time trading digital currencies through digital currency exchanges.

You should pay attention to the fact that investing in Bitcoin ETFs like BITO has its own risks, similar to buying digital currencies directly. In general, digital currency markets are volatile, which is why there is always a possibility of loss in them.

Wide acceptance of institutional digital currencies (dependent on institutions)

In 2021, large organizations operating in various industries had shown interest in digital currencies and blockchain technology and, in some cases, have invested in digital currencies. For example, AMC recently announced that it would accept Bitcoin-based payments by the end of 2022.

All the evidence shows that more and more companies will support purchases based on digital currencies. Fintech companies such as PayPal and Square have provided users with the necessary infrastructure to carry out financial transactions based on digital money. Tesla has invested heavily in this area and is still testing full cryptocurrency support.

“We’re seeing a wide range of users and organizations become interested in digital currencies, and that’s driving the industry forward,” Abner says. Some experts predict that larger companies on a global scale will start adopting digital currencies in the second half of 2022.

“What we’re seeing is big organizations like Amazon, big banks, and retailers getting involved in digital currencies,” Weiss said. For example, Amazon can build an efficient acceptance chain for others and increase the credibility of digital currencies .”

Amazon has recently sparked rumors by sharing a job posting hiring a blockchain and digital currency product manager. Walmart is also hiring a cryptocurrency expert to oversee the company’s blockchain strategy.

In a situation where buying goods with digital currencies is not a logical approach for some people, the acceptance of digital currency-based payments by retailers can change the future outlook of this market. Of course, there is still a long way to go before Bitcoin can pay for goods and services.

However, the widespread adoption of digital currencies by institutions could increase the uses of digital currencies, influence prices, and convince more users to use digital money. Use digital for daily purchases.

While there are no guarantees, buying digital currency as a long-term investment is possible that the money you buy will gain more demand and value in the future. Similar to what happened to Bitcoin.

What future awaits Bitcoin?

Bitcoin is the queen of all digital currencies. It has taken first place among cryptocurrencies because it is the most valuable digital currency. Almost all cryptocurrencies are trying to take a step toward becoming as valuable as Bitcoin.

The price of Bitcoin rose sharply in 2021, surprising everyone by hitting an all-time high of $68,000 in November. It was the highest recorded rate for this digital currency after $60,000 in April and October 2021.

Will Bitcoin set a new record in the future? Some experts believe that there is a possibility that the value of Bitcoin will reach $100,000. Kiana Daniel, author of The Beginner’s Guide to Investing in Cryptocurrencies, says: “Bitcoin’s past may provide us with clues to what’s to come.

From 2011 to today, various events have happened in connection with Bitcoin, which has increased the value of this digital currency. What I expect from Bitcoin are short-term volatility and long-term growth.”

What does the price fluctuation of digital currencies mean for investors?

Fluctuations in the price of digital currencies give investors more incentive to think about long-term investments. You don’t have to worry about short-term changes if you’re buying for long-term growth.

Since analysts constantly report upward and downward price movements, emotional reactions can lead to rash actions and loss-making decisions.

What is the future of digital currencies?

We can give a general estimate regarding the value of digital currencies for the coming months or years, but the truth is that this market is still in its infancy. Without a reliable recorded history, it is impossible to make a correct prediction. No matter what the experts say, no one knows the truth.

That’s why all economists and experts in investment supply and stock market tell people to invest only money they can afford to lose without problems in the cryptocurrency market and use more traditional and reliable methods to get more wealth.

Fredrick Stanfield, a legal financial planner at Lifewater Wealth Management, says:

“If you wake up one day and find that digital currency was banned or worthless, it shouldn’t change your life. For this reason, keep your investment limited and never place the cryptocurrency market above your financial goals, such as savings. Only then should you think about trading and entering the digital currency market.