The Impact of Cryptocurrency on the Financial Industry

When new technology is applied to a longstanding industry, disruption is often the name of the game.

That's certainly true with cryptocurrency.

Bitcoin, Litecoin, Ethereum, and the many other varieties of cryptocurrency are making a big dent in the financial sector.

Cryptocurrency Has Become a Popular New Platform for Casual Investing

As new platforms for cryptocurrency emerge, everyone starts to want a piece of the pie.

The difficulty of mining Bitcoin or Ethereum goes up with time, so those who get in early on a new currency are the ones who reap the most rewards. Thus, many people adopt cryptocurrency speculation as a way to root out new projects to invest in.

Cryptocurrency speculation can make a fortune for an investor, and it's often not been the banks these investors turn to with their money. Instead, they might buy bitcoins from Coinbase or try to mine their own coins on their personal computer.

These shifts in investment strategies have disrupted established banks and fund management firms around the world; that is money they will now lose out on if they don't adopt a new strategy for connecting with these customers.

See Also: Six Questions Every Crypto Investor Should Ask

It's Also Becoming a More Mainstream Asset Option

On the other hand, some asset management firms have already started to look into the potential of Bitcoin, both from the perspective of offering consumer products and taking up their own cryptocurrency investment projects. 

One prominent example is Fidelity, an investment giant that promised to make more options for cryptocurrency investment available to its clients.

Fidelity is working on mining its own bitcoins and making cryptocurrency management products available on its website.

More companies are sure to follow as they attempt to keep investors' money in their own hands.

Cryptocurrency Has a Global Impact

Cryptocurrency could soon shift the playing field for some of the biggest global economic players.

Just as a single example, China has a hefty Bitcoin mining market, and some mines have hundreds of computers mining Bitcoin on the local power grid at almost negligible costs.

If certain countries are able to take greater advantage of the cryptocurrency hype than others, that will almost certainly have big financial impacts on local and global economies.

Read Also: 10 Critical Things Everyone Needs to Know About Bitcoin

It's possible that people will also invest their money in outsourced cryptocurrency projects due to the lower costs of operation; that will deliver another new challenge to US financial services companies that are trying to keep up with investors.

Wrapping Up

You may not yet be able to use cryptocurrency for beer money. However, you can expect it to have some major ramifications for the way the financial sector is run in the near future.

Banks and fund managers are starting their own blockchain projects, and the options for investing or participating in cryptocurrency mining should only continue to grow.

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