4 future directions to watch for crypto
Crypto is a fast-paced, rapidly evolving market. We take a look at what could be next for this investing space.
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For many crypto investors, the drawcard isn't just investing itself.
Often, investors have an interest in the underlying tech and a curiosity about the other benefits it can bring into play.
dApps, smart contracts, gaming and more are just some of the alternative uses for crypto that have emerged.
But what's next?
We take a dive into some of the features we may see become mainstream in crypto in the coming years.
1. Tokenising real-world assets
Many assets are quite valuable on paper, but not necessarily very liquid.
This can keep traders shut out of valuable - but traditionally slow-moving - spaces, such as real estate, art or even intellectual property.
However, tokenisation is likely to add increasing liquidity to a whole range of industries.
For the asset holder, tokenisation can represent a way to capitalise on their holdings, without requiring a traditional sales process or IPO listing.
Part (or all) of an asset can be tokenised and sold, in order to generate capital and allow for greater liquidity.
Tokenisation can help enhance access for new investors, speed up the sale process and also preserve cybersecurity.
Astute readers will no doubt notice the similarity to NFTs, and it's always worth stating "Caveat emptor".
However, it's also worth noting that asset tokenisation is being taken seriously by the US and Canadian governments.
So it seems that we'll see tokenisation continuing to evolve and gain traction over the next few years.
You can learn more about tokenised stocks on the Kraken website.
2. Global payments via stablecoin
Making international payments via legacy financial systems can be a fraught process. Wire transfers may take several days to clear, fees can be extortionate and mistakes can occur.
But utilising stablecoins to make international payments may be able to avert a range of these issues.
Stablecoins are cryptocurrencies that are traditionally viewed to have a more stable value, and can be converted into the receiver's preferred currency with relative ease.
Kraken is soon set to launch Krak, a payment app for purposes like this, for the Australian market.
Given the increasing acceptance of cryptocurrencies around the globe (more on that in a minute), we are likely to see increasing numbers of companies using stablecoins for international transactions.
Kraken x Fred Schebesta
Finder Founder Fred Schebesta shows advanced crypto traders some of his key investing tips, and how the Kraken Pro app can assist.
3. Merging on-chain and off-chain
In the early days of cryptocurrency, the technical expertise required was something of a selling point.
Initial adopters tended to be highly tech-savvy, with access to powerful PCs and a vested interest in digital esoterica.
But as crypto has taken on a greater mainstream presence, it's become necessary to look for ways to make the process of buying, selling and holding it more user-friendly.
Exchanges like Kraken have already been part of the process of creating a smoother and less technical experience for the average investor.
One particular area where we're likely to see a push for change is the the merging of on-chain and off-chain transactions.
At the moment, both services have utility but potentially present obstacles for new investors.
Kraken is aiming to deliver seamless on-chain experiences in its existing product suite, through the Ink Layer 2 blockchain.
4. Increased global government legitimacy
When Bitcoin first emerged in 2009, there was immediate conversation about the possibility of it being used as a day-to-day currency.
While this hasn't quite eventuated, cryptocurrency has emerged as a viable investment class.
Ultimately, this is likely to lead to increased legitimacy from governments around the world.
Though some crypto enthusiasts balk at the idea of increased regulation, it's likely that it will be necessary in order to see cryptocurrencies reach their full potential.
Government recognition is likely to boost investor confidence, while also providing increased protection for them.
In turn, this may also open the door for greater day-to-day usage of a range of cryptocurrencies.
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