Cryptocurrency in 2022: Top 8 Trends to Watch Out For
The cryptocurrency industry has had an eventful year. Bitcoin has had a great run. With an almost 70% increase in price, the market capitalization of the crypto market briefly surpassed $3 trillion. Ethereum and a few other recently minted cryptocurrencies also performed admirably, outperforming bitcoin in most cases.
Retail investors and mainstream artists are increasingly interested in non-fungible tokens (NFTs).
Another aspect of the crypto realm that has gotten a lot of traction is Metaverse. In the metaverse, this year saw some record-breaking land deals. Facebook has renamed itself Meta and has become the forerunner in the creation of the virtual universe.
Investors are now excitedly anticipating what the crypto industry will bring in this new year. The crypto sector is likely to have a busy year in 2022. The strong market trends that began in 2021 are predicted to continue in the following year, with the crypto industry’s number of players expected to rise. In the crypto space in 2022, investors can expect to see the following trends:
1. Crypto Regulations to be in the Limelight
Let’s be clear about one thing: the bitcoin business is often believed to be resistant to regulation. That isn’t accurate at all. Indeed, it may be argued that the sector would not continue long if effective rules were in place to protect investors at the very least. Meanwhile, without disruptive technologies like blockchain, the future economy does not appear to be very bright. In essence, the only future that appears likely at this time is one in which all of these universes clash and begin to coexist in peace.
As the crypto business evolves, more governments are becoming aware of this concept, and regulations are almost certain to follow. With everything we’ve seen so far in 2021 in terms of the crypto and blockchain industry’s regulatory state, 2022 will undoubtedly be a pivotal year, especially with so many countries on the verge of launching their own digital currencies.
Governments, as slow as they are to respond to technical advances, haven’t missed the crypto boat. While bitcoin investments can assist individuals offset the effects of the recession, this is only the beginning.
Some countries already have their own digital currencies, which are comparable to bitcoin in concept but have the same value as their fiat counterparts. Consider the following example:
- China, Digital Yuan
- Ecuador, Sistema de Dinero Electrónico
- Senegal, eCFA
- Tunisia, E-dinar
El Salvador, meantime, has adopted BTC as a legal tender.
More countries are likely to follow suit in the near future. The great game-changers, though, are the applications of the technology that underpins cryptocurrencies.
Sweden, for example, has adopted blockchain technology for its registries. This type of adoption allows government agencies and personnel to share documents and have quick and safe access to them
As a result of this approach, their effectiveness may be considerably boosted. Several Indian states, meanwhile, have begun to work on adopting blockchain across the public sector.
Without a doubt, we are in the early stages of crypto’s expanding influence in governments around the world.
2. Institutional Investments Expected to Rise
In 2021, well-known firms and financial institutions have made significant investments in the crypto market. According to reports, venture capital funds and other investors spent $30 billion into the industry in 2021.
In the year 2022, the number of institutional investors in the crypto market is expected to rise. The crypto industry is set to see many more investments by the end of this year, with Microsoft and Facebook going big on metaverse ambitions and huge companies like Nike and Adidas entering the space. There is also expected to be a lot of action in the decentralized finance (DeFi) arena.
3. Stablecoins Adoption Likely to Increase
Yes! Whether bitcoin enthusiasts like it or not, anything that serves as a medium of trade must be able to maintain its value. The bitcoin market is still in its infancy, and it is still quite volatile. However, there are currently a slew of stable coins available, all of which provide the much-desired stability that mainstream users crave. As a result, it is realistic to assume that stablecoins will play a significant part in changing people’s perceptions of cryptocurrencies as largely speculative assets.
Between October 2020 and October 2021, the use of stablecoins increased by 500 percent, according to the President’s Working Group report. The main value and attraction of stablecoins is its – expected – stability, which allows crypto to be used as a transactional medium rather than a speculative investment.
The advent of stablecoins is a trend that cannot be ignored as the calendar rolls to 2022 and geopolitics continues to influence and partially lead the crypto asset debate. The next generation of popular crypto acceptance appears to be stablecoins and other crypto assets linked to external assets.
4. Bitcoin to be Under Pressure for the Foreseeable Future
Bitcoin is expected to finish the year at just under $50,000, after hitting a new high of nearly $70,000 in November 2021. It had been valued at roughly $29,000 at the start of the year. Following the enormous gains, speculators anticipate a downward trend in the heritage cryptocurrency in 2022.
Carol Alexander, a finance professor at Sussex University, told in an interview that she expects bitcoin to crash below $10,000 in 2022, wiping away all of the gains made in the previous year and a half. She considers bitcoin to be a “toy” rather than an investment because it “has no basic worth.”
However, some experts believe that the bitcoin rise will resume shortly, and that the cryptocurrency will easily breach the $100,000 milestone this time.
5. Regardless of the Price, Usability will Skyrocket
Litecoin, which debuted in 2011, was the first Bitcoin competitor to focus on speed. Ethereum 2.0 offers 100,000 transactions per second after ten years. As technology evolves, efforts to increase speed and security will continue. However, this is far from the sole efficiency boost.
Making bitcoin mining less resource-intensive, for example, was a popular topic in 2021. Environmentalists and ESG investors are pushing for more cryptocurrencies with greener options like proof-of-stake, as Bitcoin mining consumes more than 130 TWh per year. As a result, new technologies and processes that are significantly more efficient and require far less energy have been developed.
Cryptocurrency payments will also be around for a long time. The trend appears to be more of a next step in the financial revolution, with significant corporations like PayPal, Visa, and MasterCard implementing crypto-assets payments in 2021. From decentralised finance (DeFi) to NFTs, the technology that underpins current market characteristics and applications has proven to be effective time and time again.
The technology is usable, but its applications are only now becoming apparent to the general public and non-expert markets. Stablecoins, if managed properly, provide a clear and somewhat stable (no pun intended) entry point into the business for individuals and organizations. Stablecoins will play a vital part in the future of the cryptocurrency ecosystem, even if they aren’t the preferred cryptocurrency of some in the sector.
6. NFT Market Expected to Grow More
NFTs have enabled artists and innovators in obtaining decentralized funding. As a result, they have additional financial options for their creation. NFTs are quite safe and helpful in authenticating the ownership of the digital asset because they are based on blockchain technology. NFTs are quite popular among artists and producers because of these advantages. As a result, the crypto market is projected to experience an increase in the NFT market’s valuation.
7. Investing for Both Amateurs and Professionals
Accessibility is one of the fundamental aspects of investing that is changing. There was simply too much to comprehend for the average investor to commit early on. Hardware wallets and unidentified exchanges raised too many red flags.
Investing in cryptocurrencies has never been easier thanks to a flood of new services, applications, and software. Crypto is poised to become one of the most accessible assets, thanks to growing crypto awareness and user-friendly tools.
In addition, we are expected to see the development of creative solutions for producing passive income with bitcoin assets. Right now, there are various methods to make money in the crypto world, but we’re hoping that more high-yield choices will become available in the near future.
India is an excellent example of how investment is gradually becoming a new specialization for millennials and Generation Z. According to BrokerChooser, a broker search and comparison website, India already has over 10 crore cryptocurrency users. From here on out, the tendency is only anticipated to get bigger.
8. Web 3.0 expected to enter the mainstream
The third generation of the internet, Web 3.0, is currently being developed. People can now fund their websites without relying on giant corporations who operate servers and levy exorbitant fees in Web 3.0. There are also other benefits of Web 3.0, such as the ability to personalize the internet and the avoidance of single point failure (a particular social website crashing, for example, will not affect your activities for the period). The rising popularity of Web 3.0 will benefit cryptocurrencies like Ethereum, Livepeer, and Helium, as well as many other cryptos tied to the third version of the internet.
While 2021 was the year that blockchain and crypto-assets became popular, it appears that rules and standards will finally catch up to market realities in the new year. Nobody knows how blockchain and crypto assets will evolve, but one thing is certain: they’ve entered the mainstream.
Whatever happens to the pricing of specific tokens or coins, it is clear that awareness and acceptance of crypto assets will grow in the next years.
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