Crypto Trends To Watch Out for in 2022
The year 2021 was spectacular for cryptocurrencies. The price of Bitcoin reached a new high, and the rise of NFTs, as well as the rapid growth of the metaverse and DAOs, has attracted a large number of investors. What can be expected in the cryptocurrency market as the year 2022 begins? BigONE believes that there are six new cryptocurrency trends to watch in 2022.
The growth of GameFi
Even in 2022, the growth of play-to-earn games (GameFi) will continue to expand rapidly. Axie Infinity (AXS) was the first to introduce the concept of earning money through games. It combines engaging graphics and gameplay while also improving the game mechanics, resulting in an increase in demand for its crypto games. People can earn tokens in play-to-earn games, and the tokens they earn can be exchanged for cash at cryptocurrency exchanges.
Facebook decided to rename the company Meta and to make the metaverse the focus of the company’s future development. Although it is unclear what shape these virtual worlds will take, whether they will be largely decentralized, or if Meta will dominate the field. However, because cryptocurrency is the most likely form of payment in the metaverse, we can predict that cryptocurrency will play an important role in this field. In a recent report blockchain VC Outlier Ventures sees the need to have a decentralized core, with its own crypto payment system as key to the success of any virtual economy: “The defining characteristic of a true Metaverse is that it needs its own economy and currencies native to it, where value can be earnt, spent, lent, borrowed or invested interchangeably in both a physical or virtual sense and most importantly without the need for a government.”
Web3 will take shape
The foundation of the next-generation internet is Web3. It is a decentralized space in which people are rewarded for sharing their time, creating communities, and publishing content. Web3 is related to the previously mentioned play-to-earn games and metaverse, but it has a broader meaning. However, it is unclear how Web3 will evolve, just as it is uncertain how the metaverse will develop in the future. Some people believe that this is an opportunity for people to avoid the internet’s intermediary service providers and companies. Most internet users hope that Web3 will allow them to control their own data and earn crypto rewards for participating. This is also one of the primary reasons why Web3 has gained popularity.
Existing internet providers are already looking for ways to stay relevant in the age of Web3, so we are unlikely to see them eliminated by the new competition. However, as an investor, everything related to Web3 should be on your radar in 2022. Of course, the advantage is that as there’s no set definition of Web3 there are a number of companies to choose from in selecting investments, such as Nvidia the inventor of the GPU.
More regulatory policies will be involved
Since 2021, the global cryptocurrency market has been clouded by incoming crypto regulatory policies for most of the year. Some countries outright prohibit cryptocurrencies, while others such as El Salvador accept Bitcoin as legal tender. Despite their differing perspectives on cryptocurrencies, governments are no longer ignoring the existence and development of cryptocurrencies. In 2022, the governments around the world may take the following measures against cryptocurrencies:
• Stablecoin regulations: a stablecoin is a cryptocurrency whose value is linked to the value of another commodity or currency, such as gold or the US dollar. Regulators are concerned that some stablecoins do not have sufficient asset reserves to support the operation of their specific tokens. As a result, BigONE believes that new regulations for stablecoins will be in place this year.
• Strengthen crypto supervision: aside from stable currency regulations, the government is also attempting to figure out how to improve investor protections without suffocating the entire industry. Discussions on a variety of crypto-connected topics in 2021 may lead to actions in 2022.
• Central Bank Digital Currency (CBDC): governments are weighing the advantages of launching their own CBDC or ‘Govcoins’, such as digital dollars. CBDCs, unlike other cryptocurrencies, will be supported by the central bank and its government. “Some countries have embarked on digital currency projects as a bulwark against the proliferation of private cryptocurrencies such as Bitcoin. Others have set out to use CBDCs as a means of incentivizing blockchain-savvy investors and businesses to set up shop on their soil. This year will be a litmus test of which approach to CBDCs will prevail: force the use of a state digital currency at the expense of all others, or allow CBDCs to coexist among an ecosystem of other coins as a bridge between the monetary matters of state and those of the private sector,” observed a recent report in Forkast.
Cryptocurrency will be adopted by more and more industries
According to reports, the global adoption rate of cryptocurrencies increased by more than 880% in 2021 compared to the previous year. We are seeing an increase in the number of people purchasing cryptocurrency for the first time, as well as an increase in the number of merchants accepting cryptocurrency payments. People can now also purchase crypto assets in a variety of ways and earn interest. As the process of obtaining cryptocurrency evolves, it becomes easier and easier, and this trend is expected to continue in 2022.
Financial institutions’ interest in cryptocurrencies has increased
According to available data, global venture capital firms will invest nearly $30 billion in the crypto field in 2021, which is more than the sum of previous years. According to a survey of global institutional investors, 62% of investors who do not currently own cryptocurrency intend to begin investing in cryptocurrency in 2022. This means that people’s trust in cryptocurrency as an asset class is growing, and that this trust is often strengthened through regulatory measures. In November, the price of Bitcoin skyrocketed following the launch of the first Bitcoin futures ETF. Many people are hoping that the US Securities and Exchange Commission (SEC) will approve a spot ETF that will allow investors to buy and sell Bitcoin rather than Bitcoin derivatives.
Some cryptocurrencies may fail
Global cryptocurrency investors are divided on whether the overall market price will rise or fall in 2022. Because cryptocurrency is a risky investment, BigONE believes we will likely see both at the same time. As a result, price increases and crashes are both possible. Many once brilliant tokens have failed or even vanished with the passage of time, and many existing projects do not even have the foundation to sustain them through the difficult times. BigONE always recommends investing only in funds that you can afford to lose, and don’t be misled by public opinion into believing that every cryptocurrency will make massive gains.
Blockchain technology has enormous potential, and we are only now beginning to see how it will transform various industries. However, there are many unknowns, so caution and rationality are essential. It’s safe to say that 2022 is set to be another year full of surprises in the crypto world.