The Web3 industry is expanding into new territories daily. Not too long ago, cryptocurrencies were relatively obscure. However, blockchain technology integrations are now becoming commonplace industry-wide. These days, the crypto industry is constantly juggling multiple narratives. As such, predicting the next big thing in cryptocurrency can be challenging. Nevertheless, we can look to some of the most prominent narratives from the last year or so to establish what trends are most likely to reemerge. Additionally, we can look to the various advancements in Web3 technologies to get a feel of what could come next.
In this article, we’re going to explore the top candidates for the next big thing in cryptocurrency. We’ll look at some of the emerging trends that are positioned for continuing success. Plus, we’ll explore some of the biggest drivers of crypto adoption and the areas of development to look out for in the world of Web3.
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What is the Next Big Thing in Cryptocurrency?
Understanding what could be the next big thing in cryptocurrency could help you position yourself for success in the coming bull market. However, there are so many prominent narratives in the Web3 landscape that it can often be difficult to know where to start. Below, we take a closer look at some of the biggest trends that could transform the crypto landscape in the coming months.
Institutional Adoption
Institutional adoption of blockchain and cryptocurrencies is one of the biggest drivers of overall crypto adoption. Not long ago, banks and governments were quick to discourage investors from participating in the crypto economy. However, several wall street funds, commercial banks, and payment providers are now offering crypto services to their customers.
It is common for investment firms to allocate at least a small percentage of their portfolios to Bitcoin and other cryptocurrencies. Also, several publicly listed companies are putting crypto assets on their balance sheets. As more prominent businesses and investment firms advocate for cryptocurrencies, the more likely the financial sector will seek to legitimize cryptocurrencies.
Regulation
Institutional and enterprise adoption of blockchain and cryptocurrencies has a tendency to coincide with greater regulation. Although regulation may be antithetical to the financial freedom etched into the Bitcoin ethos, it is an essential component of widespread blockchain adoption. Until recently, cryptocurrencies have been incredibly difficult to regulate. However, regulators are moving quickly to legitimize cryptocurrencies and make them as safe as possible for investors.
Multiple Bitcoin exchange-traded funds (ETFs) already exist, providing investors with indirect exposure to the price of Bitcoin without the need to have custody of the underlying asset. Naturally, financial products like ETFs need to be highly regulated. As such, global financial regulators are already making strides in this department. Also, the European Markets in Crypto-assets Regulation (MiCA) framework is expected to come into effect in 2023. The pilot scheme will encourage investors within the private sector to consider the broader utility of crypto assets for financial instruments like on-chain bonds, shares, and securities.
Furthermore, several high-profile blockchain companies are working with regulators to bridge the gap between the world of traditional finance and Web3. In the near future, we can expect to see the fruits of these collaborations in the form of increased regulatory clarity and robust frameworks for policy making.
CBDCs
Central bank digital currencies (CBDCs) are government-issued digital tokens that live on the blockchain. Several major central banks from around the world are already experimenting with CBDCs. When successfully implemented, CBDCs could change how we view money and currencies. Also, CBDCs could give governments and central banks control over how we spend our money. Furthermore, some fear that CBDCs could make it easy for governments to prevent or block payments, or even take money out of accounts unannounced.
Despite the various anxieties over CBDCs, the fact that so many central banks are interested in them suggests that the adoption of blockchain by government bodies is set to increase. Naturally, the proliferation of CBDCs is also likely to coincide with an increase in regulatory clarity around crypto assets.
Biggest Trends to Watch Out For in Crypto
History doesn’t always repeat itself. However, it often rhymes! Many of the biggest trends in crypto have a tendency to cycle around and regain popularity. Furthermore, several popular narratives in blockchain and crypto are experiencing substantial technological advancements during the crypto bear market. Therefore, it makes sense that the next big thing in cryptocurrency could be an extension of an existing trend or theme. Below, we take a closer look at some of the most popular trends in crypto that are likely to make a comeback.
Non-Fungible Tokens (NFTs)
Unless you’ve been living under a rock for the past few years, you’ve likely heard about NFTs. Non-fungible tokens (NFTs) have become an essential tool for marketing and audience engagement in recent months. Brands such as Coca-Cola, Nike, and Adidas have released their own ranges of NFTs to try and capitalize on the biggest crypto trend of the last two years.
Furthermore, NFT collections like Bored Ape Yacht Club (BAYC) and CryptoPunks have garnered significant attention from A-list celebrities and crypto enthusiasts globally. Also, several crypto projects have collaborated with media figureheads to create celebrity NFT collections. This trend is promoting the adoption of Web3 and blockchain to new audiences of non-crypto-natives.
Many analysts expect to see a resurgence in the NFT space in the near future, with use cases extending well beyond gaming, art, and collectibles. Furthermore, many experts predict that NFT standards will improve in the coming years. With this, it is expected that NFTs could also become interoperable and work on multiple blockchains. Moreover, the scope for NFTs extends into real estate, certification, fractional property ownership, voting, and financial instruments like stocks and bonds.
Blockchain Gaming and the Metaverse
NFTs allow anyone to “tokenize” unique or rare assets on the blockchain. This makes them ideal for creating verifiably-scarce in-game items and collectibles. Blockchain gaming and metaverse applications are expected to disrupt a multi-billion dollar industry. The integration of Web3 technologies into popular gaming models allows players to have “skin in the game” and earn crypto rewards by participating in challenges and tournaments. However, the introduction of metaverse gaming applications is set to change how we think about our online interactions.
The metaverse is a concept that refers to an ecosystem of 3D virtual worlds that use blockchain technology, virtual reality (VR), and augmented reality (AR) to change how we connect with one another online. Metaverse applications often combine elements of blockchain gaming with decentralized finance (DeFi), NFTs, and decentralized social media to create an immersive online experience. Users can participate in various token economies and use privacy-preserving Web3 applications while engaging in many of their regular online activities.
Many media outlets expect the metaverse to be a widespread phenomenon in the near future. Not only does the metaverse have the potential to change how we have fun and enjoy ourselves online, but it could also revolutionize how we communicate at work. If media headlines are accurate, we could soon be having work meetings in the metaverse using avatars to represent ourselves in virtual meeting rooms!
Decentralized Social Media
Data privacy, censorship, and free speech are hot topics on social media right now. Most of the top social media companies harvest user data and sell it to advertising companies. Also, platforms like Twitter and Facebook have come under fire from all angles for censoring public figures and politically-charged conversations.
If you’ve become tired of scrolling through social media in recent years, you’re not alone. Blockchain-based social media platforms aim to reduce the concentration of power among technology companies and create community-governed forums that reward users with cryptocurrencies for generating and moderating content.
Decentralized Finance (DeFi)
Decentralized Finance (DeFi) is already disrupting the world of legacy finance. At the height of the 2021 bull market, the total value locked (TVL) in DeFi was around 106 billion USD. The rise of DeFi lending and yield farming protocols resulted in a frenzy of speculation and overleveraging. Plus, several prominent DeFi protocols experiencing issues that placed user funds at risk.
However, DeFi is evolving to create a safer environment for users by ironing out the kinks experienced in recent years. The DeFi industry is still relatively young. Many experts agree that the DeFi space evolved so rapidly that bugs, hacks, rug-pulls, and scams were somewhat inevitable. Nevertheless, the DeFi community is stronger than ever before, and thriving in a world of multi-chain communications.
At the beginning of the DeFi revolution, gas prices on Ethereum created a barrier to entry. Only those transacting significant sums could afford transaction fees on Ethereum, which were hundreds of dollars at the peak of the 2021 bull run. Despite this, smart contract blockchains and DeFi protocols are becoming increasingly competitive. Accordingly, we can expect to see increased stability throughout the DeFi landscape in the near future.
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Sustainable Mining
Pioneered by Bitcoin and other first-generation cryptocurrencies, the Proof-of-Work (PoW) consensus mechanism has received extensive criticism for its environmental impact. The Bitcoin network uses as much energy per day as Sweden, making sustainable energy in crypto a priority. Also, the energy requirements of the Bitcoin network will continue to increase over time.
The Proof-of-Stake (PoS) consensus mechanism is far less computationally intensive than PoW. As such, many newer cryptocurrency projects are opting for PoS. Furthermore, many mining farms are sourcing local, sustainable energy to minimize the environmental impact of cryptocurrency mining. Plus, several energy companies are using excess fuel to mine cryptocurrencies. Many steps can be taken to reduce the environmental impact of the blockchain industry. You can learn more about sustainability in crypto and blockchain by reading our “Blockchain Sustainability” article.
What is the Next Big Thing in Cryptocurrency? – Summary
The truth is that nobody really knows what the next big thing in cryptocurrency will be. However, by looking at historical trends, growing demands, and technological innovations, we can highlight areas that are likely to thrive. Furthermore, as institutional adoption of blockchain technology continues to grow, we can expect to see an industry-wide push for regulatory clarity. When crypto regulations meet the needs of institutional investors, many experts expect to see a flood of “big money” entering the crypto markets.
That said, other narratives like NFTs, blockchain gaming, and DeFi could prove to be equally effective in driving crypto adoption. With A-list celebrity endorsements throughout the NFT space and a growing ecosystem of inclusive financial products, the Web3 industry has multiple avenues for accelerating growth.
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Also, don’t forget to follow us on Twitter @MoralisAcademy! Reach out and let us know your predictions for the next big thing in cryptocurrency! Are there any trends we forgot to mention? Additionally, see our “How to Invest During a Crypto Bear Market” and “Understanding Crypto Crashes” articles to safeguard your wealth!
