Cryptocurrencies and traditional finance have always been viewed in opposition to one another, completely separate entities that can never merge or meet.
For the most part, this belief was supported by the fact that the crypto marketplace was relatively unknown and the domain of those who are interested in the mix of tech and finances.
Standard markets were reluctant to accept cryptocurrencies, believing them to be volatile to the point where they can not be considered a safe transaction or trading medium.
But this seems set to change as crypto, and Bitcoin in particular, are becoming better known among investors who are willing to give it a try to boost and diversify their portfolios.
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Bank Adoption
Some of the largest banks in the European Union have begun to enter the world of crypto as of the first quarter of 2024.
The reason for this seemingly sudden change of heart is actually quite simple: the marketplace is now subjected to much more transparent regulations.
This creates a safer landscape that is easier to navigate and less likely to cause trouble and capital losses for those who choose to invest in it.
The Markets in Crypto-Assets Regulation, known as MiCA, is bringing forth much-needed clarity for banks and showing that it was not cryptocurrencies themselves that many institutions were opposed to, but rather their uncertain status and standing within the financial world.
However, there’s a significant setback the banks will have to navigate. Although eager to integrate digital tokens and projects, most lack the technical expertise to deal with the market.
The infrastructure is also likely to be incomplete or inadequate for the demands they most likely expect to meet. The largest banking group in Austria has already joined forces with a company headquartered in Vienna which provides crypto services and other commodities trading, including exchange-traded funds. There are other banks that are already beginning to develop their own internal crypto services in response.
ETFs
Members of the Bitcoin community have been waiting for exchange-traded funds for more than a decade, so when they finally arrived on January 10th, they created an understandable stir within the market.
As expected, prices rallied in the aftermath, reaching their highest levels in history even before the halving, an event that became noteworthy in the community due to its singularity.
This is expected to change things during the halving as well and make the gains resulting from it more considerable compared to the standards of the previous halvings.
Investors and analysts have also predicted that the ETFs will attract a surge of institutional and retail-based investors.
The considerable quantities of capital they will bring will change the ways in which the market operates by boosting engagement and keeping prices more elevated.
The fact that banks across Europe are seriously looking into cryptocurrencies shows that these estimations were correct, and that Bitcoin is indeed entering a new era in its evolution.
Banks of all sizes are looking to work with cryptocurrency providers and get the hang of the marketplace so that they can get started in this ecosystem.
Expanding Uses
On top of its newfound popularity among banks, Bitcoin is also taking its first tentative steps into alternative usage, one of them being the possibility that it could be used to heat homes.
Finland is leading the way in this regard, with Bitcoin mines beginning to be integrated into district facilities in order to provide homes with the heating resulting from minting new coins.
This pioneering project is the first of its kind, and although similar use cases were proposed in the past, they remained at the stage of purely theoretical ideas.
The heat results from combining the hydro-cooled ASIC devices and the Finnish district heating system that moves the heat from centralized sources to insulated pipes in buildings.
The primary purpose is to find a way to utilize the residual heat remaining in the aftermath of the mining, and to allow the community to benefit from the energy and resource-intensive processes required to create new crypto coins.
There are also projects that utilize the hot water resulting from mining, which can reach temperatures of up to 70 degrees Celsius, with some calling it one of the most reliable solutions available for consumers.
But is it sustainable? Bitcoin has been dealing with accusations from climate activists, claiming that the mining process is fundamentally unsustainable and harms the environment due to the fact that it takes a lot of energy to create even a single BTC.
As of 2019, roughly 35% of Finland’s district heat came from wood fuels, while coal amounted to 18% of the total. Miners have designated the use of the residual heat coming from the minting process as sustainable because an increasing number of them are adopting sustainable methods that are environmentally sound and which result in lower carbon footprints.
In the past, the heat coming from Bitcoin mining has been used to heat swimming pools, cure meats and even dry out timber in order to make it fit for use.
The Future
So, what can the community expect from Bitcoin in the future? As the most important and well-known cryptocurrency, BTC has always attracted a lot of attention.
All crypto traders, even those dealing predominantly with altcoins, are looking to Bitcoin to determine the path the marketplace will take next.
It’s not an easy thing to ascertain since cryptocurrencies are so changeable, but it’s plain to see that 2024 will be a year of steady growth. The having will bring further price growth, but it will take a few more months until the effects become noticeable.
In the meantime, investors should consolidate their positions and develop solid trading strategies. Significant volatility is likely to arise in the market, and it will take a lot of discipline to avoid making impulsive decisions that sound good in theory but which are more likely to result in losses rather than gains.
At the same time, you must be sure that your plans make room for flexibility and don’t stifle the potential for unexpected gains.