Trends! Everyone talks about or is affected by trends today. Think about it for a moment, what really are trends about, and how do they affect you? A trend is no more than a pattern that persists over a given period of time. We know about fashion trends already. Everyone wants to have the latest or the best.
Wherever trends are discussed, there is always the prospect of a herd-like mentality, call it the fear of missing out, or in popular slang, FOMO. In the financial markets, trends tell a lot more than they do in the fashion industry. Trends in the financial markets are helpful in that you can use them to predict the movement in asset prices over time. For an investor, the ability to correctly predict asset values gives you an edge over the market, hence a good profit outlook.
So, what about the cryptocurrency market? Are there trends and how do they affect your investment? It’s been a few years since the supposed Bitcoin bubble burst, and many investors have learned several lessons since then. At CoinCheckup we believe that if you can monitor trends, you have a better chance of making wise investment decisions and growing your portfolio over time. But, what trends are there in the crypto world? How do you identify them and what can you learn from them?
The cryptocurrency market had for a very long time been the preserve of tech geniuses, especially when you talk about mining coins and forking. For the average netizen, mining is about precious minerals while forking is probably about something delicious. Today, the cryptocurrency world has become more welcoming than before. More information has proliferated to basic users to a point where it is easy to research and understand a lot more about the market and assets before investing.
We mentioned earlier that trends persist for a while. In the financial markets, when you study trends you notice a pattern of events for a number of years. The same applies to the cryptocurrency world. There are a few things that we can already see in action today that will continue influencing the market in general over the years. Let’s look at some of the possible patterns you could have recognized already:
Persistent Automation
Not long ago, you had to stay up long hours researching the internet to learn more about cryptocurrency so that you had enough knowledge to invest in the market, and earn some good profits. Today a lot of people don’t do that. They have trading bots and brokerage firms that handle all that for them. Tech is such a beautiful thing, right? This is one of the patterns we notice already.
There is a lot of automation in the cryptocurrency world today. As time goes, we can only expect more automation over the years. Automation is indeed a good thing. It saves you a lot of time and allows you to do other things on the side, while your cryptocurrency portfolio grows passively. Besides, a lot of people are becoming receptive to cryptocurrency, so we can only expect that as the uptake increases, there will be more interest in the services, which means that the demand for automation will only increase.
Look at it this way, for most of the fiat transactions, all you need is an Excel spreadsheet and you have your accounts managed accordingly. However, an Excel spreadsheet is already becoming mundane even for that industry. We come across and interact with a lot of data on a daily basis that Excel spreadsheets become insufficient. This is why many financial organizations are heavily invested in machine learning and deep learning algorithms. The future of the world of finance has artificial intelligence written all over it, and you can be certain the same applies to cryptocurrency too.
Machine Learning and Blockchain
We are building computers that are smarter by the day so that they can ease the workload we have to perform especially on mundane tasks. When it comes to cryptocurrency, we can expect individual investors, account managers, and other interested parties will further the need for automation by integrating machine learning into the blockchain. Why should you invest in machine learning or crypto organizations that have invested in machine learning? Like we mentioned earlier, machine learning is the future. Who wouldn’t want to invest in the future?
It is also worth mentioning at this juncture that we are fast embracing the Internet of Things, such that many organizations prefer to use business models as a service instead of having to use the physical products. This is why we see a lot of XaaS business models out there today. Your guess is as good as mine, the proliferation of the XaaS model will not leave the cryptocurrency world behind. In fact, we already have Blockchain as a Service (BaaS) model in place, with the likes of Microsoft and IBM championing this cause.
School of Cryptocurrency
It was not long ago that cryptocurrency was assumed by many to be one of the biggest scams of the century. Many people could not fathom the idea of a global currency that is not backed by gold or any central government. However, today people realize that cryptocurrency is real, even with all the controversies around it. Some of the top tech companies in the world are investing in the blockchain and even coming up with their own coins.
We expect Facebook’s Libra Coin, for example, whose release is currently expected in 2020, to be a game-changer. Look at it this way, many people shy away from Bitcoin because they don’t understand it. However, people will easily invest in Libra Coin because even though they don’t understand it, they know Facebook, and that’s the kind of confidence boost that money cannot buy.
Building on this, we can expect to have cryptocurrency and the blockchain, in general, to show up in study curriculums all over the world. If this is to be the alternative currency that frees the world from the gatekeepers in the world of finance, we must certainly learn about it, right? What better way to learn than to introduce the blockchain and cryptocurrency in the curriculum?
