The world of cryptocurrency and decentralised finance tokens has exploded in recent months, but the market is known to be incredibly volatile. Recently, cryptocurrency leaders like bitcoin have suffered due to several setbacks, prompting speculation cryptocurrency may not last long-term. But there are others who point to the impact cryptocurrency has had so far as evidence for its continued presence in the future.
What has happened recently in the world of crypto?
Bitcoin has gained criticism recently for the environmental impact associated with mining cryptocurrency.
In light of this, billionaire Elon Musk announced earlier this year that Tesla will no longer accept the cryptocurrency token as payments for its vehicles.
China also announced a crackdown on trading, sparking uncertainty.
Despite some recent issues, there have also been some signals that cryptocurrency is here to stay.
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"In payments, too, the major players are integrating crypto, including Paypal, Mastercard and visa.
"The majority of the world banks also are considering switching to central bank digital currencies; this includes the Bank of England which is considering what has come to be dubbed ‘Britcoin’.
"This is a key strategic gain for the industry on a number of fronts. It is a great sign of the dominance of crypto technology, which will increasingly be seen as standard, and that the majority of the world’s population will be using crypto, albeit sometimes without realising!"
While some believe cryptocurrency will have the power to shift how we trade across the world, others are not sure just how much of an impact cryptocurrency will have if it stays around.
Pavel Matveev, CEO of Wirex, told Express.co.uk: "The mainstream adoption of cryptocurrency is inevitable, but whether it will replace or simply support the current system of fiat money remains to be seen.
"Until then, fintech companies are going to continue to find ways to help businesses and consumers to spend digital currency in everyday life."
In addition to those who think cryptocurrency has long-term potential, there are many who think the recent interest in cryptocurrency will pass.
Mike Hampson, founder & CEO of Bishopsgate Financial, said he cannot see some cryptocurrencies as being "anything other than a bubble".
Mr Hampson told Express.co.uk: "The fact is that none of these currencies have a solid backing or are guaranteed by any government, company or even physical commodity.
"Yes, there is a ‘uniqueness’ to them, but as we have seen new cryptocurrencies can be created easily and with central banks looking at creating further ones, we will see that choice will increase, and with a higher level of certainty in terms of an investment’.
"The huge energy cost involved in mining and processing each bitcoin transaction, in particular, means that there is nothing cheap or efficient about the crypto and with concerns rising about climate impact this will only become a bigger problem.
"With the volatility, lack of intrinsic value, climate unfriendly credentials and general lack of regulatory acceptance, I cannot see the non-CBDCs cryptocurrencies being anything other than a bubble."
The information in this article does not equate to financial advice. Anyone considering investing in cryptocurrency should understand the risks involved.
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