Discover the potential of cryptocurrency, its controversial nature, and three top coins to watch for in 2030. This article provides valuable insights to help investors navigate the vast number of cryptos available.
Cryptocurrency is a controversial topic, with some seeing it as a disruptive force for the financial sector, while others view it as a potential bubble that could burst and cause problems. Despite this, the cryptocurrency market has produced significant wealth, growing over 500% to almost $1.7 trillion over the past two years, even after a recent $1 trillion crash. With the world equity market valued at $120 trillion, the potential for further growth in the cryptocurrency market exists. However, with over 17,600 cryptos in existence, investors must conduct extensive research. The article recommends three cryptocurrencies that may be among the top three by 2030.
The cryptoeconomy was sparked by Bitcoin (BTC 0.19%). A now-famous white paper was issued by Satoshi Nakamoto under a pseudonym in 2008. It explained how a blockchain—a cryptographically secure distributed database—can be used to establish a peer-to-peer electronic payment system. By doing this, consumers might conduct business with retailers directly and avoid paying fees to banks and credit card networks.
Obviously, Bitcoin has not taken the place of established financial institutions, but it has nonetheless gained popularity. Bitcoin is still by far the most valuable cryptocurrency 13 years after its launch. In actuality, its $720 billion market value represents approximately 42% of the total crypto market. Additionally, Bitcoin is worth more than publicly traded firms like Visa and Mastercard.
That success has been powered by a few elements. First, the increasing hash rate, a metric for the amount of processing power miners employ to validate transactions, shows that Bitcoin has grown more secure over time. Second, there are only 21 million coins in circulation for Bitcoin, and any economics student will tell you that when demand exceeds supply, an asset’s value will increase. Third, there is a growing demand.
Over 40 million accounts own Bitcoin, up 21% in the last three years. Perhaps more significantly, institutional investors, who control more than $100 trillion in assets, rank Bitcoin as their preferred digital asset. Institutional investors are getting more interested in digital assets, according to a Fidelity survey. And as adoption increases, the price of bitcoin should too.
Long regarded as the second-most valuable cryptocurrency, Ethereum (ETH 0.03%). Its main technological advancement is a programmable blockchain, which functions as both a ledger of financial transactions and a platform for self-executing software known as smart contracts. Decentralized applications (dApps) and decentralized finance (DeFi) services have been created using that technology, and by a significant margin, Ethereum dominates both.
In reality, the platform hosts over 2,900 dApps, ranging from NFT marketplaces like OpenSea to metaverse video games like Axie Infinity. Over 132,000 active users had used these software applications in the previous day. Ethereum DeFi products account for 59% of all blockchain DeFi investments, and investors have $118 billion in them.
However, the developer community is working on an update that might increase throughput from 14 transactions per second (TPS) to 100,000 TPS. Unfortunately, Ethereum’s success has exposed scalability difficulties that have led to transaction fees rising over the past several years. The launch of that scaling solution is anticipated for 2023, and it has the potential to accelerate Ethereum’s growth by attracting additional users, investors, and developers. As a result, the demand for the ETH coin would increase due to its popularity, raising its price.
A programmable blockchain called Terra (LUNC 1.06%) is intended to upend current financial institutions. The two cryptocurrencies it uses are Terra and Luna. The former is a stablecoin that can be pegged to fiat currencies like TerraUSD, which is pegged to the US dollar, while the latter is used to control volatility and keep stablecoin values stable. When demand for TerraUSD rises above $1, the network encourages investors to convert Luna to TerraUSD, increasing supply and lowering price. In reversal, the system operates similarly.
It is noteworthy that the Terra blockchain has cheap transaction fees due to its strong scalability, which can handle 10,000 TPS with a two-second finalization time. Investors also find this value proposition compelling. With $15.5 billion invested on the blockchain, Terra is actually the second-most well-liked DeFi ecosystem. However, some of those DeFi goods can be considerably larger because they intend to undermine banks and payment systems.
Anchor protocol stablecoin lenders receive interest. Lending TerraUSD on Anchor earns 19.5% APY, compared to 0.06% from a standard bank savings account. PaywithTerra, a payment network that uses Terra stablecoins, lets clients directly transact with merchants. Blockchain technology makes it faster and cheaper than other options. Businesses actually pay $0.05 each transaction.
Demand for Terra stablecoins is generated by Anchor and PaywithTerra together, which results in demand for Luna. The cost of Luna should increase as those items (and others) continue to gain popularity with consumers. Because of this, by 2030, this digital asset might rank alongside Bitcoin and Ethereum as one of the top three cryptocurrencies.