Cryptocurrencies are digital assets based on cryptology and distributed ledger technology (DLT). Cryptocurrencies use cryptography to secure transactions and control the creation of new units.
2021 was a great year for cryptocurrency, with the cryptocurrency prices of Ethereum touching a whopping $4,800, the highest ever. The main question that now stands is, what to expect in 2022? Here are some of the top crypto trends expected in 2022:
The Market Has Enough Maturity to Have a Bitcoin ETF (Exchange-Traded Fund)
The US Securities and Exchange Commission (SEC) has rejected several applications for Bitcoin ETFs in the past, but we will likely see one soon.
Many investors are interested in Bitcoin, but they are not able to put their money in it because of its high volatility. Also, many countries have already applied taxes on Bitcoin transactions. Make sure to check out the guide on bitcoin taxes to learn more. An ETF would bring a lot of capital into the cryptocurrency markets and make Bitcoin more stable.
Stable Coins Are Evolving Just as Blockchain Technology Is
Stable coins are cryptocurrencies that are pegged to currencies like the dollar or euro. They can be used for payments and cross-border transactions—and they’re more stable than other cryptocurrencies. They’re also used for hedging against price volatility and trading on margin, as well as providing investment opportunities in stocks and bonds (though these gains will not be exempt from taxes). Therefore, in the same way that blockchain technology is evolving, so are stable coins.
As more people adopt cryptocurrency technology across all industries in 2022 and beyond, expect these types of currency to become more prevalent in mainstream use cases.
Privatization and Adoption Are Drawing Big Corporations
Cryptocurrencies have been around for quite some time, but they’ve never been adopted by the masses. Today, however, there are many big corporations adopting cryptocurrencies and using them in their businesses. Some of the most notable include Walmart Inc., Amazon Inc., and Starbucks Corp.
While Bitcoin has been around since 2009, adoption by major corporations has taken time due to regulatory issues surrounding cryptocurrencies like taxes and security concerns.
However, these hurdles are beginning to be overcome with new technologies entering the space like blockchain technology, which provides an immutable ledger system that allows anyone who owns coins/tokens created within these blockchains access rights based on how many coins/tokens one owns relative to others within said blockchains.
Cryptocurrency Exchanges Have Grown in Size, Users, and Liquidity
With so many different assets and exchanges available, it’s no surprise that these platforms have evolved to become more than just places where you can buy and sell crypto.
Today’s exchanges offer a variety of services, including lending, staking, trading, and earning dividends on your holdings—all to attract new customers. In addition to this evolution from being just a place to trade cryptocurrencies into a platform for trading/lending/staking/earning etc.
Defi Ecosystems Are on Their Way to Growing Big
DeFi is short for decentralized finance, and it’s an open financial system built on blockchain and smart contracts. It’s censorship-resistant, permissionless, and borderless. This means that you can send money from one country to another without a middleman or any other authority intervening.
DeFi is also transparent because all transactions are recorded on the blockchain in real-time. The idea behind DeFi is to create a trustless environment where people can lend or borrow money without worrying about fraud or scams being perpetrated against them.
The good news? You don’t need to understand how DeFi works to take advantage of it; there are many different services out there that might appeal to your needs!
NFTs Are Gaining Popularity Due to the Growing Interest From Retail Investors
Non-fungible tokens (NFTs) are crypto-tokens that represent a unique digital asset. Unlike fungible tokens, which can be interchangeable and have identical values, NFTs are not interchangeable, and there are varying levels of rarity.
For example, you could have a rare digital painting that is worth $200 million, while the same artist’s other paintings may only be worth $10 each. In this case, you would hold onto your painting because it has real value, and since it cannot be duplicated, no one else can buy it from you at any price they choose.
Another interesting application of NFTs is in the gaming industry, where players can purchase collectibles such as characters or items in games like Fortnite or League of Legends (LOL). With LOL, for example, players can spend real money on virtual skins for their teams’ characters which could eventually become valuable if certain players become famous within the game community.
Regulators Will Get Involved in Crypto Markets in a Major Way in the Next Couple of Years
The regulatory landscape surrounding cryptocurrency is becoming more complex, and this trend will likely continue in the years to come. Regulators will get involved in cryptocurrency markets in a major way in the next couple of years for several reasons:
- To bring legitimacy to digital currencies. There are many benefits of regulation—more trust among users, easier access for new investors, more transparency for everyone involved—and regulators are going to realize them sooner rather than later.
- To protect customers from scams and frauds. We’ve already seen some signs that this may be happening already; Japan recently banned some ICOs (initial coin offerings) after they discovered that many were fraudulent or even scams designed solely to steal money from investors.
It is safe to say that cryptocurrencies are here to stay. Cryptocurrency value will keep increasing, and it will keep growing. Eventually, they will be a part of all our lives. Cryptocurrency markets are one of the fastest-growing markets in the world today, and it’s only going to get bigger with time.
Cryptocurrencies are a good investment because cryptocurrency prices are extremely volatile; this means that if you invest in cryptocurrencies at an opportune time, your investments can increase exponentially rather quickly—just like how Bitcoin went from $1,000 per coin to over $20k per coin in just nine years! The same thing could happen with any other cryptocurrency.