The past few years have seen massive leaps in computing that have irrevocably changed many aspects of our lives, more so the financial sector. The old ways of interacting with money, like using cash and ATMs, are slowly being replaced with more accessible, decentralized means. Rather than physical banks and locations, people are increasingly storing their money on their phones via new-age technologies.
Though this resolution is still in its early stages, many people are betting cryptocurrencies and fintech will become the future of finance. Every day, cryptocurrencies are challenging legacy financial technologies as they develop in volume and power, promising to become the future status quo. In 2021, the future of cryptocurrencies became a lot clearer, was adopted more, and based on how things are unfolding, the trend is likely to continue well into the future.
Cryptocurrency and the Blockchain
Cryptocurrencies are digital tokens secured and encrypted on a network built on revolutionary blockchain technology. The first decentralized cryptocurrency, Bitcoin, was launched in 2009. Since then, it has grown to be the largest and most popular decentralized currency globally. Over the years, the coin has grown to a market cap of $786 billion in early 2022.
Though the word “Bitcoin ” and “Blockchain” have been thrown around lately, they are not synonymous. Blockchain is an immutable record that safely holds encrypted data transactions on the network. Bitcoin as a currency operates on its blockchain system, which supports the recording and storing of transactions.
Today, blockchain technology has seen increased adoption across the globe, with over 16,000 cryptocurrencies created. Although bitcoin is the most significant crypto on the planet, other blockchains host Etherium and other related technologies. All the cryptocurrencies are estimated to have a total valuation of about $2 trillion.
Before engaging with cryptocurrencies, you should make sure you understand the risks involved in the market. Cryptocurrencies are decentralized, and they are not immune to market shocks, making financial services offered by companies like Capital Exploits much more helpful. An example of this was best demonstrated a few months ago when the American Federal Reserve took a hostile position against cryptocurrencies, foreshadowing an increase in interest rates, leading to a bearish run.
There is also the risk that comes from the fact that cryptocurrencies are perceived to be inherently risky because they are not tied to a central bank or sovereign, which makes them harder to control. This makes them quite attractive to finance-based criminal actors for use in criminal activities like money laundering, going around control capitals, and buying controlled substances.
Popularity of Cryptocurrencies
Cryptocurrencies have grown in popularity through increased investments and adoption over the past few years. Experts agree this trend is likely to continue in the next few years to come. Today, cryptocurrency adoption has grown to include about 4% of the total world population, about 300 million people, with projections seeing this trend continuing well into the future.
The Gartner Institute claims that by 2024, at least 20 percent of all large enterprises are expected to be using cryptocurrency in various aspects, from collateral to value storage in their business model and financial institutions.
To help navigate the inherent volatility of cryptocurrencies, Stablecoin has grown in adoption. These are cryptocurrency tokens that have been tied to regular fiat currencies to make them a lot more stable. This stability enhances their transparency making them more efficient for value transfers.
Cryptocurrencies and the Future
According to analysts at Gartner, through their report Predicts 2022: Prepare for Blockchain-Based Digital Disruption, cryptocurrencies are expected to find adoption in retail in the next three to five years. Increasing inflation seems to threaten traditional investment vehicles, making cryptocurrencies a hedge in the coming years. However, Bitcoin has been quite volatile over the past few years swinging from an all-time $68,223 to halving in a few months.
Despite this volatility, investors and banks have remained steadfast in their opinions on cryptocurrency. The draw is not just speculation; sophisticated investors have increasingly become more interested in decentralized finance (DeFi). The industry has attracted investment from legacy institutions, now holding about 0.08%, with estimates indicating hedge funds will have 7% of cryptocurrencies in their portfolios.
While at first, governments were apprehensive about cryptocurrencies, in the past few years, we have seen more governments begin researching the ways to experiment and implement them in the central bank currencies. This is an exciting development because these banks control about 90% of the total world GDP. China, India, and the United States have all shown interest signaling the trend is likely to continue.
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Scams and Cryptocurrencies
Cryptocurrencies are relatively new, and consequently, there has been very little to no regulation in this space. Lack of regulation has created an environment ready for fraud and exploitation by bad actors. Instances of scams in the crypto space have seen a gradual increase hitting an all-time high of $14 billion in 2021, up from $7.8 billion the previous year.
However, with increased awareness, criminal activities involving cryptocurrencies are expected to fall by 30% by 2022, according to analysts from Gartner. The most common of these scams is the “rug pulls,” where people build seemingly legitimate things on the surface only to disappear with the investor’s money. Rogue states like North Korea have managed to extract about 400 million dollars worth of digital assets after engaging in at least seven attacks across different cryptocurrency platforms, including banks and centralized exchanges.
However, with increased growth in the space, illegal activities involving cryptocurrencies have been at an all-time low. Despite an increase in illicit use of cryptocurrencies in absolute terms, only 0.15% of transactions were illegal in 2021, down from 0.62% in 2020.
Due to these drawbacks and uncertainties of the crypto world, it helps to have a reliable source of information that you can trust to update you on crypto news. One such company is Capital Exploits, whose professional money managers and financial experts scour the unseen opportunities in the crypto field. They develop reports and update their clientele on the changes happening in the industry and how best to use them to their advantage.
Alternative uses of Blockchain Technologies
Thinking of cryptocurrencies as the future of money means they hold a special place in use as customer reward programs. Traditionally, getting reward points meant you have subscribed to the specific terms and conditions set by the corporations. This causes a lot of hostility by the customers because of inflexibility, leading to lower revenues and damaging the brand.
Non-fungible tokens have also emerged as one of the most innovative and lucrative implementations of blockchain technology. This technology democratizes the art scene primarily dominated by high-income people. Through this tech, regular people can own one-of-a-kind artwork ranging from a painting to a tweet.
Blockchain technology has also gained the attention of various technologies as they develop a new virtual reality universe. This will create a market for these blockchain-based assets increasing the market. This space is likely to be very exciting and lucrative in the future. Capital Exploits keep keen attention on the market to get you the best deals in the space.
Conclusion
The crypto market can be very confusing for newcomers. Companies like Capital Exploits have products like Insider that offer investment ideas, support, and Q&A sessions to deliver digestible reports on the blockchain technology world. With Capital Exploits, you can match the moves of the world’s most sophisticated investors in hedge funds around the world.
Information from the reports Capitalist Exploits provides can help you take charge of your investments. You can make 3X to 100X returns on your investment with minimal risk and diversify by buying over 60 well-rated investments across 12 different sectors.