It’s astounding how the Cryptocurrency industry positively responded to the current global pandemic. Considering the pandemic (Covid-19) had a massive negative effect on the financial market, it pulled down global economies. In layman thinking, it seems cryptocurrencies are immune to the pandemic since the crypto trading trends are simultaneously developing and creating profits for many crypto traders.
There is evident growth in the industry from the growing interest in digital government currencies, the introduction of PayPal Crypto service, upcoming stablecoin, Diem (ex-Libra), and more. This a confirmation that digital assets will have a lasting effect on the financial market. However, the speed of cryptocurrency distribution is determined by the brand. The acceptance of the crypto by the traditional bank system and as a payment service. The Cryptocurrency industry trends rely on profits and risks posed by the market.
Different trends that will change the crypto world today
1. Crypto will face tax regulation
The future will implement tax regulation for cryptocurrencies. Currently, crypto taxation is murky. It’s still not a reality for many as the crypto taxes are not widely known. However, some countries are getting the crypto concept. The government can notice the increase in revenue provided by the industry.
The industry has introduced mandatory user identification using the “Know your customer “(KYC) process. New protocols to trace every transaction and legislation on digital assets. These are proof practices of the changing crypto market. The tech market has created monitoring tools, and the government exchanging information on the owners of cryptocurrencies. The government can trace the transaction they conduct. There may be the first Bitcoin (crypto) tax evasion law in 2012.
2. A silent crypto harbors
There is always resistance to change and anti-trend for every new trend. The introduction of crypto taxes evasion law. It is likely to attract opposition as users in the market resists the implementation of new tax laws. This means people or traders will legally minimise the cost of having digital assets. It’s also likely developed countries will initiate the anti-trend. Which has both IT and the financial market at a balance? There are such markets as Singapore, Korea, Japan, Switzerland, and more.
3. The risk assessment model will improve
The increasing value of cryptocurrencies attracts potential risk in the trade. There is a need to implement risk management tools to curb any rising menace. In a study by CoinMarketCap, the financial industry has 8,000 plus cryptocurrencies in the world. However, most of the currencies (90percent) are fraud schemes designed to loot traders without offering any profits. The other 10 percent have the potential for growth and good profits, which might be better than Bitcoin.
Risk which raises or collapses the value of any cryptocurrency
The user should consider the country the currency is operating in. the kind of legislation changes the government is posing in the digital assets market.
The technical features are a priority before settling for any coin. The user needs to learn the errors in codes, information, or data security protection policy. Learn the potential risk which can emerge such as cybercrimes.
Price risk is the most challenging risk to assess in the cryptocurrency world. However, the introduction of KYC and KYT (transaction identification) laws. It will help analysts can now track every movement of funds in terms of cryptocurrencies. They can also get information about the owner and trace all the actions and sale processes.
All these changes can help the user predict the changes in the value of the Cryptocurrency trends. The value is also determined by the goals, time, sales, and market size increase
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