With cryptocurrency prices skyrocketing this year, crypto experts are bullish about the further growth of cryptocurrencies and crypto space in general. According to these experts, the crypto space will witness more competition in 2022. Bitcoin was the best performing asset in 2011-2021, with a staggering growth percentage of 230% in these ten years. These days, almost everyone is holding cryptocurrency in their investment portfolio. 2021 was a great year to invest in cryptocurrencies as several significant companies started embracing crypto in one way or another. There was a massive growth in Ethereum network transactions and an increasing adoption of smart contracts on the Ethereum network.
El Salvador recognized bitcoin as a legal tender, thus making a landmark in mainstream crypto adoption. Besides that, several crypto companies, miners, and enablers went public in 2021. This includes Coinbase and Coinshares. Even non-fungible tokens (NFTs) gained so much popularity this year, with some selling for millions of dollars. US regulators approved a bitcoin futures-based exchange-traded fund in the US context. They recognize cryptocurrencies as real assets and take progressive steps to make the crypto space safer and more institutionalized. As we see, a lot changed this year in the crypto space. Owing to all these positive developments, we expect greater adoption and use of cryptocurrencies in 2022. The developments in 2022 will be laid on the changes made this year. Right now, the future seems pretty optimistic both for crypto investors and crypto space.
Greater Integration of Crypto in the Financial System
In September 2021, bitcoin became a legal tender in El Salvador. This has been a landmark step for crypto advocates. They expect more countries to follow this pattern and accept digital currencies as a part of their financial ecosystem. Even the Eurozone is likely to pass its crypto regulations known as the Markets in Crypto-Assets framework. Similarly, the US also began to regulate cryptocurrencies more precisely by launching the infrastructure bill last month. The bill intends to make crypto space safer for investors and ensure no tax evasion. Other countries will be encouraged to follow and correspondingly regulate similarly. This will create a domino effect that will force other countries’ governments also to incorporate similar measures to regulate crypto space.
Crypto will Become a More Accepted Payment Method
One of the major critiques of cryptocurrencies is the lack of broader acceptance as payment for basic stuff. This year several major companies like Mastercard, AXA insurance, Starbucks, and the list goes on and on. Even Tesla said that it would accept bitcoin as payment for its cars. However, it halted accepting payments in bitcoin until a greener way of bitcoin mining was found. Recently. Tesla’s CEO Elon Musk hinted that Tesla might start accepting bitcoin again soon. This is a great development because as major companies start accepting payments in bitcoin, it will increase the legitimization of cryptocurrencies more.
Central Banks Might Issue Their Currency
Earlier this year, we heard that China is cracking down on its crypto miners because it plans to introduce its bank-issued digital currency. This is primarily because of the fear of increasing fraud and scams in the crypto space. To fend those threats, many countries are thinking about ways they can introduce their bank-issued digital currency. Even the US is thinking about the digital dollar, and the European Union is considering introducing its digital euro. This shows that major economies are interested in regulating and accepting the crypto space.
Bitcoin Might Just Go Green
China banned cryptocurrency mining due to environmental concerns and the heavy drains on non-renewable sources of energy. Since then, Chinese investors have moved to Texas to resume their bitcoin mining operations. The Texas government has given these miners an impetus to use sustainable, environmentally friendly, and renewable energy sources like wind. Tragically, Environmental, Social, and Governance concerns keep on plaguing the digital currency industry, explicitly concerns encompassing the energy use needed to mine Bitcoin. While the discussion proceeds, we think that crypto miners will keep on thinking about ways to mine cryptocurrencies in a more environmentally friendly way. Revolt Blockchain, a leading U.S. Bitcoin digger, is a significant promoter and advocate of the Bitcoin mining industry as a powerful force in discussing sustainable energy utilization. Fortification Digital Mining, recorded in Q4 of 2021, is another ESG-centered Bitcoin mining organization that uses coal mining by-products to produce the power used to mine Bitcoin. We expect sustainability-centered mining organizations to keep on developing in the crypto market.
Investors May Increase Their Crypto Investments
As cryptocurrencies become more mainstream, they’re being embraced with tremendous enthusiasm into the investment portfolios of individual investors, companies, and firms. Some crypto advocates and enthusiasts suggest that cryptocurrency allocations will be up by a few percentage points, and more companies will designate fiat money to cryptos and digital currencies. These kinds of portion shifts will probably take on their own pace, which means more and more money will probably be pumping into digital currencies in 2022.
Greater Usability of Cryptocurrencies
2021 was a successful year for non-fungible tokens (NFTs). As of September 2021, the total deals worth of NFTs in the art market totaled around an astounding $774 million. We have effectively used blockchain advancements to make immutable and non-reproducible digital artwork. Its record is maintained by many computers all over the planet. Given the success of NFTs, there is a good chance that more use cases of cryptocurrencies will be found out in the next year.
In 2022, we may see blockchain advancements making our digital identities more protected, secure, and more straightforward to manage, alongside several advancements and uses in medical care, public policy, and across the financial ecosystem.
At Unbanked, we believe cryptocurrencies can revolutionize several industries, including finance, healthcare, and education. To know more about cryptocurrencies, read our blog.