The Future of Bitcoin and Cryptocurrency: 5 Trends to Look For in 2022

2021 was a volatile but very successful year for cryptocurrencies. Crypto-currency market capitalization tripled from less than $ 800 billion on January 1 to about $ 2.2 trillion today, with some assets making astronomical returns in terms of price and users. And these increases are distributed across the ecosystem.

In addition, the continued success of DeFi (decentralized finance) and non – commutative tokens (NFTs) applications indicates that the coming year could be even more profitable.

Here are the top five crypto scenarios to watch as 2022 begins.

1. More regulation

The cryptocurrency industry has prospered to date thanks to (or despite) its decentralized structure and unregulated nature. But many industry actors will tell you that they are open to regulations as long as the rules are applied transparently.

Governments have tried to find a way to regulate cryptocurrencies in a way that prevents cybercrime and increases the safety of retail investors. China has shown a (handsome) way to do this, which is to make cryptocurrency activities within its borders almost illegal.

Crypto investors and entrepreneurs are expecting a more modest approach in the United States and Europe, where the SEC, CFTC and Treasury Department offices have all proposed new regulations. Regulation for investors could lead to clearer tax guidelines. And if major cryptocurrency trading tools adapt to regulations, they could help drive adoption by providing investors with an extra layer of security.

2. Bitcoin ATMs are on the rise

The intangible nature of cryptocurrencies has long worked against them; many people find it difficult to consider bitcoins as real money because they cannot see or touch bitcoins. But now that bitcoin ATM installation is slowly taking place in various parts of the world, people will be able to perceive digital assets as tangible investment instruments.

The number of bitcoin ATMs has steadily increased since 2015 and reached new highs in 2021. Today, there are more than 33,000 bitcoin ATMs worldwide, according to Coin ATM Radar.

Bitcoin ATMs basically allow people to buy BTC using their credit or debit cards. This makes cryptocurrencies very accessible for beginners. Bitcoin ATMs can eliminate the need for crypto-currency brokers, as people can easily make cryptocurrencies while using them – although the fees may still entice people to look for better rates elsewhere.

3. Environmental improvements

Crypto-skeptics have focused on the environmental impact of blockchain networks.

Bitcoin mining actually requires a lot of computing power, which consumes a lot of energy. Since most cryptocurrency market capitalization is generated by coins that use work proof for their mining process, there are unlikely to be any major changes in energy costs for 2022. In addition to the high energy costs of bitcoin mining, the process generates lots of e – waste too. from spent mining rigs.

On the other hand, newer cryptocurrencies like Cardano and Solana are to be commended for adopting a method of proof, which is not rigorous. And Ethereum, the second currency in terms of market capitalization, is about to make the following move to proof, which would encourage other cryptocurrencies to follow their process and make their processes much more environmentally friendly. If the adoption of environmentally friendly cryptocurrencies grows in 2022, it will benefit space, even if bitcoin’s energy consumption does not improve.

4. Continuous Bitcoin Price Volatility

Bitcoin is by far the largest cryptocurrency in the world and its price remains the most widely accepted benchmark for the cryptocurrency market.

In 2021, bitcoin posted steadily volatile performance setting an all-time high in April above $ 60,000, then crashed to below $ 30,000 in July, before setting a new full-time high near $ 70,000 in November and then falling to the current level well below. $ 50,000.

This volatility – the trait cited by bitcoin carriers to dispel asset gravity – is likely to continue for much longer than 2022, as the crypto market is not yet mature.

Volatility is one of the reasons why many traders love Bitcoin – its fluctuations allow for arbitrage opportunities – but also why many asset managers advise to be careful and tell their clients to allocate only 5% from their wallets. to crypt. Investors should be fully prepared for bitcoin dipping as often as it rises.

Cryptocurrency proponents expect bitcoin and other securities to remain volatile in the short term, but steadily increase in value in the long run, despite sharp periodic corrections. Therefore, investors should be patient, not worry about temporary progress, and committed to a long-term perspective.

5. Crypto ETF Approvals

When BITO, the first bitcoin futures ETF (exchange-traded fund), which debuted on the New York Stock Exchange this year, reached 1.5 billion euros. This is an immediate confirmation of investors’ long-standing interest in a crypto product that they can buy and trade on regular stock exchanges.

But BITO does not have bitcoin – it is a way for retail investors to gain exposure to bitcoin with futures contracts, not actual BTC. It is not an ETF present“. SEC has been added floods applications for ETFs based on the current price of cryptocurrencies, but never authorized any. However, given BITO’s performance and investor confidence, there is a high probability that an ETF spot on bitcoin will be authorized in 2022 or very soon, as well as potential ETFs linked to other cryptocurrencies. , which could attract flooding. new retail investors.