CRYPTOCURRENCIES AND THEIR PLACE IN THE MODERN FINANCIAL SYSTEM
Abstract
This article explores the role of cryptocurrencies in the modern financial system. The aim of the study is to examine the development features of cryptocurrencies and their impact on the global economy. General scientific methods of cognition were used in the research: analysis, synthesis, induction, deduction, comparison, generalization. The research results show that on a global level, cryptocurrencies exhibit several features that affect the economy. Initially, cryptocurrencies were considered a niche asset for technologically savvy investors, but over time their popularity has significantly increased, attracting a wide range of investors, including institutional funds and financial organizations. This has led to the growth of market capitalizations and increased impact on financial markets. For example, the market capitalization of cryptocurrencies rapidly grew from $1.9 trillion in June 2021 to $2.9 trillion in December 2021. Then there was a significant decline to $0.889 trillion in December 2022, which could have been caused by economic instabilities, regulatory changes, and reduced investment activity. Since December 2022, a recovery trend has been observed, with capitalization rising to $2.4 trillion in March 2024, supported by positive regulatory changes, technological innovations, and increased trust in digital assets. The study also indicates high volatility of cryptocurrencies and their dependence on global economic conditions, investor sentiment, technological breakthroughs, and the regulatory environment. An analysis of digital asset revenues in Ukraine reveals stable and significant growth. From 2023 to 2028, cryptocurrency revenues have significantly increased, highlighting the potential of cryptocurrencies not only as a speculative asset but also as a means of payment and a tool for financial innovation. Such growth promotes the development of the infrastructure and technologies necessary for integrating cryptocurrencies into everyday life. The practical significance of the study lies in emphasizing the potential of cryptocurrencies as a tool for financial innovation and their impact on the global economy and financial system.
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