What's next for cryptocurrencies?

What is it used for?

An economy tested at full scale

For more than fifteen years, cryptocurrencies have operated as a large-scale economic laboratory. Researchers at the Massachusetts Institute of Technology (MIT) have been studying blockchain technologies to understand how strangers can establish trust without banks or other intermediaries and examining how transaction costs can be reduced or redistributed and how rules embedded in code might replace traditional institutional arrangements.

In Europe, the Cambridge Centre for Alternative Finance is studying blockchain systems, examining transaction validation, the role of network participants, energy consumption and the economics of mining, and demonstrating how a monetary system can operate without a central bank, relying instead on shared and collectively verified rules.

Cryptocurrencies are also an ideal testing ground for analysing 24-hour global markets. Bitcoin's price, for example, is a real-time barometer, swinging instantly on economic news, global tensions or exchange collapses. These market reactions give researchers insight into price formation, extreme volatility and collective behaviour. 

Finally, crypto-assets also provide a window into regulatory frameworks in the making. The European Union has introduced the Markets in Crypto-Assets (MiCA) Regulation to oversee the issuance and trading of crypto-assets, while in the United States, the U.S. Securities and Exchange Commission is gradually defining where traditional financial assets end and digital ones begin.

Institutional turning point

Cryptocurrencies are held by a wide array of actors, including individuals using them for savings and transfers, alongside listed companies and financial institutions. As these new uses emerge, governments are moving to regulate the crypto ecosystem. 

Responding to the growing crypto market, the European Union enacted the Markets in Crypto-Assets (MiCA) Regulation in 2023. By protecting consumers, raising transparency standards and regulating stablecoin issuers, Europe has set itself apart as one of the world’s most advanced regulators.

The European Central Bank (ECB), however, has excluded Bitcoin and other cryptocurrencies from eurozone central bank reserves, citing their failure to meet the necessary standards of liquidity, security and stability for sovereign assets. Meanwhile, some central banks are developing official central bank digital currencies (CBDCs), which leverage blockchain-style technology while remaining fully under public authority.

Anti-money laundering authorities are stepping up scrutiny of exchange platforms, given the pseudonymous nature of crypto transactions. In 2023, the UK tightened regulations on misleading advertising, while Japan — following several high-profile cyberattacks — now enforces strict security standards for trading platforms.

The transaction cycle

A high-risk investment 

The primary weakness of cryptocurrencies is their volatility. Between October 2025 and February 2026, Bitcoin lost almost half of its market value, while the collapse of the supposedly “stable” UST stablecoin in 2022 almost wiped out the UST-linked Luna token in just days.

Even with a robust blockchain, users remain vulnerable to cyberattacks, as the surrounding services can contain serious flaws: in 2022, the Ronin blockchain, which powers transactions for the game Axie Infinity, was the target of a theft worth more than $600 million in 2022.

Centralised exchanges like Binance and Coinbase simplify crypto-asset management but introduce risks such as bankruptcy or withdrawal freezes. FTX’s 2022 downfall serves as a cautionary tale: when users rushed to withdraw assets amid solvency doubts, the resulting liquidity crisis forced a halt on transactions. It is a stark reminder that intermediaries create vulnerabilities in a universe intended to bypass them. 

Lastly, despite blockchain’s inherent security, scams remain widespread. These include fake projects and “pump and dump” schemes where fraudsters hype a token to inflate its price, only to sell off their holdings at the peak, causing the price to crash and investors to incur heavy losses. A striking example is OneCoin, a fraudulent cryptocurrency that defrauded three million people worldwide of several billion dollars between 2014 and 2017, highlighting the sheer scale of the risk.

Three possible future outcomes

Even after fifteen years, the global role of cryptocurrencies is far from settled, and economists agree that their prospects remain open to a wide range of possibilities.

One likely scenario, according to financial analysts and institutional actors, is the gradual integration of cryptocurrencies. Banks and financial institutions will continue to explore asset tokenisation, converting real-world assets, such as property, artworks and receivables, into digital assets, as governments pilot the use of stablecoins and blockchain for payment systems and international transfers, and people use cryptocurrencies to send money overseas or to access services online.

In an alternative scenario, cryptocurrencies could remain a specialised niche, used mainly for technical purposes such as DeFi, digital infrastructure and occasional payment applications. For the general public, they would continue to be seen primarily as speculative instruments, highly susceptible to cycles of euphoria and panic. 

In a third scenario, cryptocurrencies could undergo a profound transformation. Goods, legal rights and services would be converted into digital tokens, making them easier to trade, while certain paperwork and payments could be automated online. These innovations might give rise to entirely new applications that are difficult to envision today.

The future of cryptocurrencies — whether through integration, specialisation or transformation — will hinge on technological and regulatory developments, widespread public adoption and the practical demands of the global economy.