The year is 2027. It is a time of great innovation and technological advancement, but also a time of chaos. What will the crypto market look like in 2027? (For those who don’t know, this is a line from the 2011 video game, Two Ex.)
Long-term predictions are notoriously difficult to make, but they are good thought experiments. A year is too short a period for fundamental changes, but five years is just enough for everything to change.
Here are the most unexpected and outrageous things that could happen in the next five years.
1. The Metaverse Won’t Rise
The Metaverse is a hot topic, but most people don’t even have a clue what it actually includes. The Metaverse is a holistic virtual world that exists permanently (without pauses or resets), operates in real time, accommodates 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 licensing services – anything.
This definition clearly shows 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 quite some time. Certainly, interoperability is an issue that needs to be addressed seriously. 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 meet all the needs. There is no reason to include certain services in the metaverse. Some services will remain isolated due to the reluctance of their operators to cede control.
The “metaverse” is going to happen, but I don’t think any of the existing attempts by companies to intentionally create the metaverse are going anywhere. https://t.co/tVUfq4CWmP
— vitalik.eth (@VitalikButerin) July 30, 2022
And there is also the technical aspect to take into account. The cyberpunk culture of the 1980s and 90s assumed that the metaverse meant total immersion. Such immersion is now only thought to be possible with the use of virtual reality glasses. VR hardware is getting better every year, but it’s not what we expected. Virtual reality remains a niche phenomenon, even among hardcore gamers. The vast majority of everyday people will never put on such glasses to call grandma or sell crypto on an exchange.
True immersion requires a technological breakthrough like smart contact lenses or Neuralink. It is very unlikely that these 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, lending protocols – there are hundreds of them and they are growing every day. Having to live with such an array of technologies is impractical, even for advanced users. As for the prospects of 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 are accessible through a limited number of universal applications. The optimal choice is when they are integrated directly into their portfolio. Store, exchange, transfer to other networks, staking, why bother visiting dozens of different sites to access such services if all the necessary operations can be performed through a single interface?
Users don’t care which exchange or bridge they use. They only care about security, speed, and low fees. A significant number of DeFi protocols will eventually morph into back-ends that cater to popular wallets and interfaces.
3. Bitcoin will become a unit of account at parity with the US dollar or the euro
Money has three main roles: to serve as a means of payment, a store of value and 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 United States dollar remains the main unit of account in the world. Everything is valued in dollars, including Bitcoin.
The real victory of sound money will be announced when cryptocurrencies take the role of unit of account. Bitcoin is currently the leading contender for this role. Such a victory will mean a major mental shift.
Wheat up 43% in the first 5 months of this year
Nat Gas 155% since January, +10% today
Let’s see how long the “consumer stays strong” as it erodes what little savings they have left and debt piles up
Fight inflation with inflation just print more lol pic.twitter.com/b19becqa2x
— Pentoshi (driving the cattle to the butcher) (@ Pentosh1) June 6, 2022
What needs to happen over the next five years for this to become a possibility?
A sharp decline in trust in the US dollar and the euro is a prerequisite for cryptocurrencies to assume the role of basic unit of account. Western authorities have already done much to undermine this trust by printing trillions of dollars in fiat currency, allowing abnormally high inflation to soar, freezing hundreds of billions of a sovereign country’s reserves, and more. This may just be the start.
What happens 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 into neighboring countries? All of these scenarios are feasible. Some are extreme, of course, but they are possible.
4. At least half of the top 50 cryptocurrencies will see their position decline
There is a high probability that the list of major cryptocurrencies will change drastically. Outright zombies such as Ethereum Classic (ETC) will be squeezed out of the list, and projects that now seem to hold steadfast positions will not only be dethroned, but could also disappear altogether.
RELATED: 6 Questions to Quadrata’s Lisa Fridman
Some stablecoins will surely sink. New ones will take their place. Cardano (ADA) will slide down the list to officially become a living corpse. The project is progressing terribly slowly. Not only do the developers not see this as a problem, but they even seem to see it as a benefit.
5. The Crypto Market Will Fragment Along Geographic Lines
Cryptocurrencies are global by default, but they are not invulnerable to the influence of individual states. The state still has an advantage and an extra trick up its sleeve. A number of jurisdictions (United States, European Union, China, India, Russia, etc.) have already implemented or are threatening to implement strict cryptocurrency regulations.
The factor of international competition is superimposed on the internal motivations of the State. When Russia was heavily sanctioned, some crypto projects started blocking Russian users from accessing their services or even blocking their funds. This scenario could play out again in the future when it comes to China.
RELATED: Is There A Way For The Crypto Sector To Avoid Bear Markets Tied To The Bitcoin Halving?
It’s not hard to imagine a future in which parts of the crypto market work in favor of some countries while closing themselves off to others. We already live in such a future, at least to some extent.
The opinions expressed are those of the author alone and do not necessarily reflect the views of Cointelegraph. This article is for general informational purposes and is not intended to be and should not be considered legal or investment advice.