Although 2021 saw a lot of ups and downs in the crypto industry, 2022 is panning out to be shaped by developments and trends hard to be ignored.
The crypto market notched all-time highs last year but also experienced big drops. So, it should come as no surprise that this arena is becoming even more intriguing. Some of the most significant developments across the crypto space in the previous year include Bitcoin’s uncountable gains and those of other established coins like Ethereum. Also, NFTs have increased in popularity, with the Metaverse on their heels. To make it clear from the beginning, many crypto trends announced in 2022 are going to be an extension and advancement of the trends that started to arise in 2021.
Individuals are increasingly curious to explore the crypto space and discover its mysteries, so if you are one of those enthusiastic investors thrilled to make the most out of digital coins in 2022, consider the trends we will explore in the following lines.
Worldwide Adaptation of Cryptocurrencies
Crypto started to gain trust among potential consumers. More and more individuals are using some form of cryptocurrency in their purchases, which only makes us wonder: where are digital assets headed in the following year? We think pretty far since countries like El Salvador and the Central African Republic have already adopted Bitcoin as legal tender. El Salvador is the first state to approve a form of cryptocurrency as legal tender in the previous year. It was rapidly followed by the Central African Republic, which included Bitcoin in its financial model. Increasingly more countries are seeing the crypto’s potential, which says a lot – there is hope that cryptocurrency in one form or another will be approved in many states soon.
Crypto Market Regulation
Experts say that the lack of regulations highly contributes to market fluctuation. That is also one of the reasons cryptocurrencies are still perceived as some game and not as a trustworthy financial source. Regulations are the only ones to bring some order in what has come to be called the Wild West phase in digital asset development. That is why governments are looking to enforce future regulations regarding the crypto industry. Although this is still a sci-fi topic, government entities are believed to create legal frameworks for some crypto projects like the NFTs and Metaverse in 2022. And it is only normal to be so – clear guidelines will help enthusiastic investors/traders and skeptical alike better understand and act in this virtual environment. Without a doubt, cryptocurrencies have grabbed the attention of many financial institutions and governments that work on incorporating CBDSs (central bank digital currencies), that is, creating their own electronic currencies. On the flip side of the coin, countries like India are trying to implement regulations banning private virtual assets.
DeFi to Grow in Bounds and Leaps
DeFi or decentralized finances are going to be huge in 2022, and this is a fact. Unsurprisingly or not, the funds deposited in DeFi services seize approximately US$200, meaning that more and more government bodies and financial institutions have started implementing DeFi as a business standard. In other words, 2022 is a positive year for DeFi, with many projects (each with its own tokens and coins) ahead.
Web 3.0 to Enter the Mainstream
The third version of the Internet has generated a buzz lately, with people increasingly curious about what it will be like. More connected, intelligent, and open, Web 3.0 is already making waves among users, all the more so among crypto enthusiasts since it is a blockchain-based version of the Internet. For the first time, individuals can personalize the Internet and take maximum advantage of its new features. They can fund their web pages without relying on big companies that own servers, avoid a single point failure, and recover control of their data. Moreover, cryptos like Ethereum and Helium will see a positive evolution since they are connected to the third Internet version.
Ethereum 2.0 Reaching Its Potential
Ethereum is on almost everyone’s lips since individuals have discovered its multiple benefits. Traders and developers use the platform for various purposes, which is also the magic of Ethereum. Unlike other platforms that focus merely on exchange and or value storage, Ethereum can be used to create applications like games and financial apps designed to ease individuals’ jobs when it comes to financial transactions or the transfer of personal data.
The business landscape witnessed the introduction of an innovative concept at the end of 2020: Ethereum 2.0. It is believed to be a game changer, with many upgrades that help the platform reach its full potential. Thus, Proof of Work (PoW) will turn into Proof of Stake (PoS), which makes fans wait even more fiercely for the launch of this new Ethereum version.
What else is to be expected?
- Deflationary Ether (ETH). The latest PoS and EIP 1559 update is likely to lead to cryptocurrency going down. The shortage that is to come may, in turn, generate an increase in the asset’s valuation. So, 2022 may be the best year to invest in Ethereum. However, we recommend thoroughly scrutinizing the market and documenting the token before making the big move. Constantly check the from reputable and trustworthy sources, and do not forget to determine your risk level.
- Lower energy consumption
- Scalability
Expansion of the NFT Market
Non-fungible tokens (NFTs) have a huge potential, especially since the ownership of such digital assets relates to both physical and virtual property. Art galleries and museums have become increasingly interested in NFTs, as well as some celebrities and large corporations that perceive these tokens as valuable artworks, contrary to what some individuals may believe, that is, a simple art fad. NFTs are, in fact, door openers for many artists and collectors from all around the world, and we do not doubt they will take art to the next level.
These ingenious crypto trends shape 2022 – did something grab your attention? We hope these insights will help you find your path in this vast crypto world and, why not, make a profit out of it.