In 2021, cryptocurrency’s popularity grew even further. In fact, Goldman Sachs began accepting cryptocurrency.
CNBC reports that Bitcoin (BTC), the most well-known cryptocurrency, has soared by approximately 70% since 2021 started. This has fueled the global crypto industry, which is now worth around $2 trillion.
That is indeed a mind-boggling number.
BTC touched its all-time high of US$67,000 in November last year.
Things went so positive that financial analysts predicted that the digital coin will surpass US$100,000 before 2022 ends.
However, it experienced a brief period of bullishness, as all financial instruments do.
Those who are investment savvy are aware of the fact that nothing stays bullish forever.
Top 10 Predictions about the future of cryptocurrency
If the past poses any indication of the future of cryptocurrency, BTC is likely to reach unforeseen heights before 2022 ends.
Not only BTC, but other popular currencies, including Ethereum (Ether) and Solana, are also witnessing a high tide as far as their valuations are concerned.
Keeping in mind the craze surrounding Bitcoin and cryptocurrency as a whole, here are the top 10 predictions for 2022. Stay tuned.
- Bitcoin will attract more investors
Cryptocurrency experts believe that by the end of this year, over 500 million people around the world would invest in Bitcoin.
Among the factors that are contributing to an increase in popularity and adoption of bitcoin and other cryptocurrencies is the regulatory clarity from global governments. Additionally, increased attention on educating customers about how crypto works is also playing an important role behind such a popularity surge.
If you don’t own any cryptocurrency, now might be the best time to diversify your portfolio. You can buy bitcoin on Moonpay and store it until its price soars in the near future.
Iconic investor Warren Buffet made his first investment when he was 11. Today, he is 91 and one of the wealthiest people to have ever lived. You never know how early investment can transform your life.
- Get ready for DeFi and DAO
If you have been following crypto news lately, you probably have heard about Decentralized finance (DeFi) and decentralized autonomous organizations (DAOs). These two are expected to emerge as the fastest-growing sectors of crypto.
DAOs have the potential to become a new internet community, while DeFi attempts to transform the financial industry without the need of any middlemen.
In 2021, the value of deposits made into DeFi products and services exceeded $200 billion. A further surge in demand is fairly expected in 2022.
Investors should keep an eye on smaller cryptocurrencies like Ethereum, Polkadot, Solana, and Cardano.
Another notable trend that shows an immense potential is the ‘Web3’.
Web3 proposes a new, decentralized internet that incorporates blockchain technology and NFT (non-fungible tokens). If you don’t know already, blockchain is a much wider concept than cryptocurrency.
To learn more about blockchain and its true potential, consider reading “blockchain beyond money”.
- The first Bitcoin ETF might get approved
Some cryptocurrency investors are expecting that the first Bitcoin spot ETF (exchange-traded fund) may be approved in the US this year.
If such a thing happens, it would provide investors with exposure to cryptocurrency. And this might inspire similar approvals across the globe.
Last year, the SEC (Securities and Exchange Commission) approved the Bitcoin Strategy ETF by ProShares.
However, it isn’t a full-fledged bitcoin ETF. Instead, it only tracks Bitcoin futures contracts.
Analysts expect that a spot Bitcoin ETF will soon be approved, given that the market has expanded and matured enough to accommodate and support it.
- Expect more tightened regulations
Several investors and analysts anticipate that new crypto laws will be implemented worldwide in 2022.
Global government groups feel that larger industry participants are seeking crystal laws.
It is expected that integrating such clearer regulations would help establish confidence in the crypto industry, which in turn, would encourage more people to adopt cryptos in the near future.
- Ethereum will claim Bitcoin’s market share
There’s no doubt that Bitcoin is the most popular cryptocurrency in the world. This particular coin has seen extreme interest among millennials and crypto-loving individuals alike.
Although Bitcoin is expected to reach newer heights, it will be Ethereum that will stay under the spotlight.
As a general trend, people will show more interest in other currencies ranking in the top 25.
In 2021, Ether gained 418 percent, while Bitcoin rose 66 percent. Similar figures will continue to emerge in 2022 as well. This might happen because of the spike in NFT sales volumes.
Since the majority of these tokens are based on the Ethereum network, it is the crypto coin that will gain the most.
- The crypto-based digital dollar is on its way
If you are not aware of yet, most major and emerging economies around the world are seriously considering rolling out both retail and wholesale Central Bank Digital Currency (CBDC).
In fact, Jamaica has announced the first-quarter rollout of its centralized digital currency, Jam-Dex.
On the other hand, Mexico also aims to launch a digital peso by 2024.
Recently, China introduced its digital yuan, which is so far the most significant one, given that China is the world’s second-largest economy.
Following this spectacular unveiling, the United States of America might enter the digital game as well. If everything goes as expected, the digital dollar might find its place at NASDAQ soon enough, most probably in 2022.
- NFTs will foster a new crypto culture
Non-fungible tokens or NFTs have a plethora of applications, ranging from gaming to arts to financial and legal domains, such as asset tokenization and real estate. Furthermore, numerous advantages are waiting for those who adopt this particular technological trend.
For instance, Real estate developers can massively extend their pools of buyers at all levels simply by fractionalizing ownership of property via NFT tokenization. Indeed, that’s finance on a whole different level.
On the other hand, artists and musicians will be able to generate automated royalty through the resale of everything they produce. To know how NFTs are making a dent in the art world, consider reading “The Creator’s Eye for NFTs”.
- Bitcoin’s relation with S&P 500
Ever since the COVID-19 pandemic hit, global economies crumbled as a result of an unexpected threat.
Despite such global economic threats, both Bitcoin and S&P 500 witnessed significant gains in 2021.
As mentioned earlier Bitcoin soared 66 percent while the benchmark index surged roughly 27 percent.
According to experts, Bitcoin has been performing similarly to a risk-on asset.
The cryptocurrency is expected to exacerbate stock market behavior in 2022 and beyond. This means that if the stock market rises in 2022, Bitcoin would certainly outperform it. On the other hand, Bitcoin will almost certainly underperform in case the stock market experiences a bad year.
- The metaverse will further intensify
The metaverse has been the talk of the town ever since Facebook changed its name to Meta.
Experts believe that it will become an increasingly important component of the economy, society, and overall culture due to its interactive nature as a platform for businesses, social interactions, education, pleasure, and politics.
Whether the metaverse would or would not be decentralized is still unpredictable, but it is indeed on its way.
In this regard, it is safe to bet that Facebook will not be king of the metaverse.
Instead, a new revolution awaits us all and only time will reveal what’s coming. But one thing is certain. The metaverse is already here (a miniature version of what it is visualized) and it will eventually become a giant.
- Global banks will launch more crypto-related services
We all know how bitter a relationship it is between centralized banking authorities and cryptocurrencies like Bitcoin. However, things will not remain as they are now.
The ever-growing popularity of crypto is prompting more central banks across the globe to offer cryptocurrency-related services to the masses by the end of 2022.
As per experts, major banks around the globe are currently working on certain projects that mimic or reflect cryptocurrencies’ decentralized nature.
In fact, these global banks are almost ready to launch several financial programs tailored to the needs of their customers. The question here is not ‘if’ it would happen but ‘when’. And when it happens, the global economy is the one that will benefit.
For a long time, the number of crypto investors has been expanding steadily worldwide. However, the volume has recently exploded. Furthermore, the typical cryptocurrency investor profile has transformed significantly.
Cryptocurrency investment is no longer just a passion or hobby. Rather, it has become an increasingly popular investment instrument for ordinary people. It seems that the general public has finally figured out this particular asset class as an opportunity to supplement their portfolios with a more profitable avenue.
So far we have discussed what the ecosystem surrounding cryptocurrencies would look like in 2022.
However, that’s not all.
According to analysts, the global cryptocurrency industry would reach roughly $5 billion in value by 2030.
The ever-growing wave of crypto will not be ignorable for long.