There is no denying that 2021 was the year that cryptocurrency became mainstream. Even with some pretty bad crashes to counter the boom, Bitcoin has gained acceptance as a financial asset rather than a fictitious and elusive financial project. Cryptocurrency came into place, showing governments, financial institutions, and corporations in general what a boon to the economy and the bottom line it can be. Non-fungible tokens (NFTs) are introducing blockchain technology into mainstream culture, attracting buyers who are not interested in financial cryptocurrencies. And millennials are no longer the only ones piling on as investors.
So, without further ado, here are 10 predictions of what the year 2022 holds for cryptocurrencies.
Cryptography (more) goes mainstream: Estimates of how many Americans own or own cryptocurrency vary widely, but the 12% to 13% range appears to be where the most neutral surveys come in. Wealthy investors and institutions seem to be piling up as the investment options offered by banks, hedge funds and other advisors grow. Main Street is a different story. Bitcoin may be in the doldrums in price terms right now, but it’s getting easier for regular people to buy the biggest cryptocurrencies thanks to Square, PayPal, Venmo, Robinhood, and other options that don’t require signing up for an exchange account or buying a cold wallet — or finding out what Is the cold wallet – multiply.
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Altcoins ready for their close ups: Bitcoin and Ether are becoming more widely known, at least among millennials/Generation Z and the curious crowd of cryptocurrencies. As BTC and ETH become more popular as investments, interest in investing in the top 10 to top 25 cryptocurrencies will increase. Expect to hear about Solana, Cardano, Polkadot, Avalanche, Polygon, Algorand, and other serious investment currencies. We like to say that the result of this is dogecoin and his ardent followers like Shiba Inu will disappear, but expect to see Elon Musk continue to successfully push prank coins into dangerous territory.
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Stablecoin regulation explodes: The December announcement that Meta-owned Novi Wallet is experimenting with Paxos stablecoin payments on WhatsApp, Mark Zuckerberg’s two-billion-customer messaging app is no different from Facebook’s adoption of Libra/Diem stablecoin. The prospect of this global, non-national currency becoming available to Facebook’s 2.3 billion customers made politicians, Treasury officials, and central bank governors around the world back off in 2019. They feared that it would undermine national currencies and government control over financial systems, increasing the likelihood of Run virtual banks, unleashing the epidemic on financial institutions in general. They will soon wake up to the fact that Paxos/WhatsApp is nothing more than a name change, and that the regulatory hammer will collapse.
See also: The battle of Stablecoins against CBDCs is really two mini wars fighting each other
The digital dollar is coming: There is already plenty of evidence that countries around the world are getting more serious about central bank digital currencies — a domestically issued digital legal tender that competes with stablecoins and cryptocurrencies for payment — with Jamaica announcing a digital currency launch in the first quarter and Mexico aiming to launch a cryptocurrency. Digital Peso in 2024 to start the new year. Most major economies and large developing countries from the European Union to India are seriously considering both retail banking and wholesale digital currencies for merchandise – in fact, almost everyone except the United States. That will change by February, when China introduces the digital yuan into the world’s second-largest economy (third if it considers the European Union as a single entity) and the argument that the United States is falling behind its biggest economic, political, and military rival becomes real for voters at large. Treasury Secretary Janet Yellen remains hesitant, and Federal Reserve Chairman Jerome Powell sees no reason to. The Fed will slow, but the digital dollar will transition from an “if” to a “when” in 2022.
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The Securities and Exchange Commission will gain crypto authority: The US Securities and Exchange Commission (SEC) is likely to get the official supervisory authority over the cryptocurrency that President Gary Gensler wants, rather than a new agency, but with its wings clipped. Congress will urge the Securities and Exchange Commission (SEC) to provide a more flexible and appropriate definition of innovation when cryptocurrency is – and more importantly – security, perhaps giving the CFTC some oversight role.
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Cryptocurrencies take a lot of funding: The largest banks and financial institutions offer bitcoin investments to wealthy clients, offer custody solutions, and look to adopt cryptocurrencies for back-settlement — some notably like JPMorgan Chase with its stablecoin blockchain company JPM Coin, others using merchant solutions like international payments company Ripple, and still others Wholesale CBDCs. Crypto and blockchain departments at financial institutions and investment firms operate on hiring terms, and executives understand that they need to understand this. Government regulators around the world are planning how to regulate crypto – both at the hash and the institutional level – rather than cracking it.
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Bitcoin will fade as a currency: It might break Jack Dorsey’s heart, but bitcoin and all other unstable cryptocurrencies are simply too volatile to use as a daily currency anywhere the economy hasn’t completely collapsed — we’re looking at you, El Salvador And You, Tesla. Between stablecoins and CBDCs, Bitcoin creator Satoshi Nakamoto will lose the payments battle, but his technology – the blockchain – will start winning the war.
See more: Twitter, Square CEO Jack Dorsey Bullish On Bitcoin
DeFi will be selected: We’ll be skeptical of cryptography here. Decentralized finance will appear to have legs and flourish this year, but the legs will slowly be cut from under it in two ways: first, regulation. This may be a process that takes several years, but governments do not like financial markets that they cannot control. They may or may not be able to stop decentralized exchanges and lending platforms from the list, but they can certainly make their use illegal. (Warning: If DeFi becomes a partisan issue supported by the Republican Party and opposed by Democrats, it will take longer.) Second, financial institution (FI) intermediaries will adopt blockchain tools that give DeFi much of its advantage but benefit from centralized management. Either way, consumers will benefit once.
The corollary to this is that DAOs – decentralized autonomous organizations that allow decentralized models of governance – will see wider adoption. Look at ConstitutionDAO more than lending platforms, as truly transparent governance has a lot of uses.
Read more: DeFi is the new big thing in encryption. But what is it? Here’s everything you need to know
NFTs will permeate the culture: Non-fungible tokens have many potential uses in fields ranging from the arts to gaming to legal and financial fields such as real estate and asset tokenization. Besides, there are plenty of benefits for people who will have to adopt it: Artists and musicians can build automated ownership into the resale of anything they produce, while property sellers will be able to significantly expand buyer groups at all levels by segmenting property ownership via markup. NFT.
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Metaverses will show that they have legs: The interactive nature of metaverses as a platform for social interaction, commerce, entertainment, education and politics will make it a larger and larger part of both the economy and culture. It may or may not be decentralized, but they are coming. However, Facebook will not judge the metaverse. It’s very difficult and very suspicious to move quickly and break things anymore.
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