What will the cryptocurrency market look like in 2027? Here are 5 predictions

The year is 2027. It is a time of great innovation and technological progress, but also a time of chaos. What will the cryptocurrency market look like in 2027? (For those unfamiliar with him, this is a joke from the 2011 video game, Deus ex.)

Long-term predictions are notoriously difficult to make, but they are good thought experiments. One year is too short a period for fundamental changes, but five years is barely enough for everything to change.

Here are the most unexpected and outrageous events that could happen in the next five years.

1. The metaverse will not increase

The metaverse is a hot topic, but most people don’t even have a clue what it actually encompasses. The metaverse is a holistic virtual world that exists continuously (without pauses or resets), works in real time, hosts any number of users, has its own economy, is created by the participants themselves, and is characterized by unprecedented interoperability. . A variety of applications could (in theory) be integrated into the metaverse, including games, video conferencing applications, driver’s license services, anything.

This definition makes it clear that the metaverse is not such a new phenomenon. Games and social networks that include most of the features mentioned above have been around for some time. Of course, interoperability is an issue that needs to be seriously addressed. It would have been a very useful feature to be able to easily transfer digital assets between games or a digital identity without being tied to a specific platform.

But the metaverse will never be able to satisfy every need. There is no reason to include some services in the metaverse. Some services will remain isolated due to the reluctance of their operators to relinquish control over them.

And there is also the technical aspect to take into account. The cyberpunk culture of the 1980s and 1990s postulated that the metaverse meant total immersion. Such immersion is now conceived as possible only with the use of virtual reality glasses. VR hardware gets better every year, but that’s not what we expected. Virtual reality remains a niche phenomenon even among hardcore gamers. The vast majority of ordinary people will never wear these glasses to call grandma or sell some cryptocurrency on an exchange.

True immersion requires a technological breakthrough like smart contact lenses or Neuralink. It is highly unlikely that such technologies will be widely used in five years.

2. Wallets will become “super apps”

An active decentralized finance (DeFi) user is forced to manage dozens of protocols these days. Wallets, interfaces, exchanges, bridges, loan protocols: there are hundreds of them and they are growing every day. Having to live with such a range of technologies is inconvenient even for advanced users. As for the prospects for mass adoption, such a state of affairs is all the more unacceptable.

For the ordinary user, it is ideal when a maximum number of services can be accessed through a limited number of universal applications. The best choice is when they are integrated directly into their portfolio. Archive, exchange, transfer to other networks, staking: why bother visiting dozens of different sites to access these services if all the necessary operations can be performed using a single interface?

Users don’t care which exchange or bridge they use. They only care about safety, speed and low fares. A significant number of DeFi protocols will eventually turn into backends that cater to popular wallets and interfaces.

3. Bitcoin will become a unit of account at par with the US dollar or the euro

Money has three main roles: to act as a means of payment, as a store of value and as a unit of account. Many cryptocurrencies, mainly stablecoins, are used as a means of payment. Bitcoin (BTC) and to a much lesser extent Ether (ETH) are used as stores of value among cryptocurrencies. But the US dollar remains the largest unit of account in the world. Everything is valued in dollars, including Bitcoin.

The true victory of healthy money will be heralded when cryptocurrencies take over the role of unit of account. Bitcoin is currently the top candidate for this role. Such a victory will mean a major mental shift.

What needs to happen in the next five years to make this a possibility?

A sharp decline in confidence in the US dollar and the euro is a prerequisite for cryptocurrencies to take on the role of basic unit of account. Western authorities have already done much to undermine that confidence by printing trillions of dollars in fiat money, allowing abnormally high inflation, freezing hundreds of billions of a sovereign country’s reserves, and so on. This may be just the beginning.

What if actual inflation becomes much worse than expected? What if the economic crisis continues? What if a new epidemic breaks out? What if the conflict in Ukraine spills over to neighboring countries? All of these are feasible scenarios. Some are extreme, of course, but they are possible.

4. At least half of the top 50 cryptocurrencies will see their permanent decline

There is a high probability that the list of major cryptocurrencies will change dramatically. Real zombies like Ethereum Classic (ETC) will be kicked off the list and projects that now appear to hold firm positions will not only be dethroned, but could also vanish altogether.

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Some stablecoins are sure to sink. The new ones will take their place. Cardano (ADA) will scroll down the list to officially become a living corpse. The project proceeds at excruciating slowness. The developers not only don’t see this as a problem, they even seem to see it as an advantage.

5. The cryptocurrency market will fragment along geographic lines

Cryptocurrencies are global by default, but are not invulnerable to the influence of individual states. The state always has an advantage and an ace up its sleeve. Several territories (United States, European Union, China, India, Russia, etc.) have already introduced or are threatening to introduce strict cryptocurrency regulation.

The factor of international competition overlaps with the internal motivations of the state. When Russia was heavily sanctioned, some cryptocurrency projects started blocking Russian users from accessing their services or even blocking their funds. This scenario could recur in the future with respect to China.

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It is not difficult to imagine a future where parts of the cryptocurrency market will work in favor of some countries while closing others. We are already experiencing such a future, at least to some extent.

The views expressed are those of the author only and do not necessarily reflect the views of Cointelegraph. This article is for general information purposes and is not intended and should not be considered legal or investment advice.

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