Crypto Trends Are Making 2022: The crypto subject is hotter than ever as countries decide to either regulate, embrace, or ban digital currencies.
While El Salvador adopted Bitcoin as legal tender, China banned all cryptocurrency transactions, leaving crypto experts to wonder what events should we expect to change the world in 2022.
Well, predicting what the future months will bring for cryptocurrencies is challenging, as worldwide events have always impacted their evolution. Over the last few years, digital currencies have rocketed in market capitalisation to over $1.7 trillion (in January 2022), and they now are the fourth-most popular type of investment among entrepreneurs. Before discussing the trends expected to impact the crypto world in 2022, there are a couple of things everyone should understand about this universe: it consists of different kinds of cryptocurrencies powered by different blockchains.
Even if Bitcoin is the most popular cryptocurrency, many others are available and more profitable to invest in. Ether is the second-largest cryptocurrency and has a different purpose than Bitcoin because it contains a code to trigger purchases and sales when specific conditions are met. The market also includes altcoins, a special category that includes cryptocurrencies like Litecoin and Ripple.
The underlying technology of blockchains powers each of these cryptocurrencies, registering all transactions and ensuring no data is altered in the process. Different blockchains support different digital coins; ether exists on the Ethereum blockchain, while bitcoin on the bitcoin blockchain.
In the given context, investments in cryptocurrencies have skyrocketed because many entrepreneurs consider them an asset worthy of using for portfolio diversification. With all the movements in the market, the crypto universe is becoming more and more intriguing, and it’s paramount to keep up with the latest trends if you want to get a taste of crypto investing. Here are the trends expected to change in 2022 and make it a year to remember.
Countries continue to work on regulating cryptocurrencies
As stated earlier several countries have adopted cryptocurrencies within their traditional financial systems over the last year. El Salvador adopted Bitcoin as a legal tender in September 2021, becoming the first country in the world to do it. Following its example, the Central African Republic was the world’s second to name Bitcoin a legal tender. And the adoption of cryptocurrency regulation doesn’t seem to stop here, as other countries intend to embrace crypto tokens into their existing financial systems.
Globally, the digital currency market works to create a well-established regulation. Lawmakers worldwide are creating guidelines and laws to make crypto investing safer for entrepreneurs. Industry experts believe that stricter regulation could deter cybercriminals. Still, the truth is that developing a regulation comes with several challenges because different organisations may or may not have the jurisdiction to apply them.
Some regulations aim to help investors keep records of their capital losses and gains when trading crypto assets. Also, new guidelines could make it easier for them to report crypto transactions properly. However, all these regulations are expected to affect crypto prices. But at the end of the day, financial experts believe that regulation could prove beneficial for the crypto industry, especially in the existing extra volatile market.
While Bitcoin loses market share, other digital coins drive cryptocurrency growth
No cryptocurrency expert is surprised to find out that Bitcoin accounted for most of the growth of the crypto market in the past years, but some may be dazzled to find out that the crypto token lost market share to other cryptocurrencies in the last few years. As statistics show, other crypto tokens outperformed Bitcoin, and its share of the market dropped to 43% at the beginning of 2022, from 90% in 2016, due to Ethereum and altcoins expansion.
Ethereum accounted for the first portion of the lopsided growth. If you tracked Ethereum’s price on Binance, you most likely noticed that it experienced numerous ups and downs over the years, as crypto enthusiasts speculated on its various applications on its blockchain. But since January 2021, it stayed at between 15% and 20% of the market, while Bitcoin registered a steady decline.
NFT market continues to grow
If, in the beginning, some questioned the potential of NFTs, now everyone agrees that it’s huge, as they can transfer rights for both physical and virtual property. Therefore, investors’ interest in NFTs will most definitely grow, and specialists expect them to be held and treated by traditional institutions like galleries and museums. If you’re up to date with the latest news, you probably know that many celebrities and corporations are already labelling NFTs as the latest bedrock of the virtual economy.
NFTs have gained so much popularity among investors because they offer access to decentralised funding solutions, which greatly benefit creators and artists. This access offers them greater freedom in financing their artwork.
One of the reasons the NFT market is expected to continue to grow is that the transactions are pretty secure, as NFTs are also based on blockchain technology.
Web 3.0 is no longer just a concept
Web 3.0 already impacts several aspects of the crypto world, and its third version will continue to create waves beyond 2022. Those who want to fund their web pages without depending on large corporations or paying expensive fees turn to Web 3.0, which provides more sustainable solutions.
And let’s not forget to mention that Web 3.0 enables users to personalise the Internet. The increasing acceptance of Web 3.0 affects the evolution of digital currencies like Ethereum, Helium, and Livepeer because they’re directly linked to the third version of the Internet.
Those familiar with the subject know there has always been a lot of speculation around cryptocurrencies, and this won’t stop in the following months. However, even in a volatile market, they remain a profitable investment, but it’s crucial to keep an eye on the latest trends to take advantage of the opportunities the market presents.
Investors should be prepared to venture into a future of cryptocurrency with some swings. If the trends remain positive, exploring the crypto universe is an option.