Eye on 2022: Cryptocurrency trends to watch out for

HIGHLIGHTS

• The year 2022 could well see new beginnings in the crypto market.
• From Bitcoin ATMs, altcoins growth, new altcoins, and others could be a few things on the card next year.

The year 2021 was a roller coaster ride for the cryptocurrency market. After touching the highs of April to the lows of May and July, the cryptocurrency market has seen it all this year. The Bitcoin ETFs was a watershed moment in the crypto industry so was China banning cryptocurrencies in the country. Also, the El Salvador’s disruptive move to adopt Bitcoin as legal tender and the debut of eNiara in Nigeria. All these events of 2021 have made a profound impact on the market, and its effect could well define the investment trends in 2022. 

Cryptocurrency trends to watch out for in 2022

Market participants are already waiting in anticipation to see how the market will react in 2022. Traditionally if you look at it, January month has always been filled with air and anticipation, especially for Bitcoin. And it will be safe to say that a good beginning to the year will usher both the feelings of hope and fear within the market participants. 

So, let’s look at the 7 trends that could define the crypto market and could well be a game-changer in how this market operates. 

1. Altcoins can touch newer heights

Altcoins have had a great run in the H2 2021, and it is expected to continue their stronghold in 2022 as well. One can expect a huge increase in the popularity of altcoins and define the whole year. Altcoins such as Aave, Solana, Chainlink etc., have seen as a bull run in the second half of 2021, and is expected to consolidate further in 2022.

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As a result, Bitcoin may experience depreciation in its value for a short period of time in 2022. This could also push the prices of the altcoins up, triggering another stronger bull run for them. 

2. Bitcoin as a mode of payment
   

The year 2022 could see more firms adopting Bitcoin as a mode of payment for daily business. People may see Bitcoins being used in grocery stores or used to pay fees or salaries and other transactions. 

Increased acceptance of Bitcoins would mean setting up of more and more Bitcoin ATMs. Many countries have already set up Bitcoin ATMs. Crypto ATMs have already become popular in countries like the US and El Salvador. Now, more and more governments may explore BTC as a form of legal tender as predicted by experts.  

3. Era of CBDC
   

With countries exploring the opportunities to launch their own CBDCs, 2022 could well be the golden year many countries experimenting with their own versions of digital currencies. The central bank-backed digital currencies have been in talks for quite some time now. China could well take the lead with the launch of its Digital Yen in 2022. China is expected to allow foreign visitors to use Digital Yen during the Winter Olympics in 2022.

The US and South American countries may also start with the trial phase, starting the era of CBDCs. 

4. Emphasis on environment

With increased emphasis on the environment and emission control measures, mining could well go greener. Bitcoin mining uses enormous amount of energy and has an insufferable impact on the price of digital token. Hence, it is expected that miners could see newer ways to mine using green technology without harming the token in 2022.

Source: Copyright © 2021 Kalkine Media

For all you know, one could even witness something called carbon taxation, which is in talks for quite some time now. Though nothing final has been decided on that front. 

While these are few of the expected trends, lets also look at the unexpected trends that we could see in 2022.

5. Usage of fiat transactions becoming obsolete
   

The way cryptocurrencies are growing and the rate at which it is getting adopted, we could well see the usage fiat currency becoming obsolete. With crypto payments being allowed in many countries, the digital currencies could enter more domains of our daily lives and activities and there would be less dependency on fiat currency.

As Bitcoin is termed as Digital gold, it is in fact setting new barriers and creating new yardsticks for itself each day. Although at the moment, it may seem a bit farfetched, but we could see go into redundancy as soon as 2022. 

6. Reduction in the number of crypto frauds

Crypto regulations are a significant topic of discussion across the world. The year 2022 could well see many economies adopting stronger and stringent regulations to monitor cryptocurrency trade. This could result in the reduction of cryptocurrency frauds and more transparent transactions. 

The recent Squid Games scam has further enhanced regulations to make sure that the investors don’t end up losing their money. Stronger regulations would mean strict punishments for the defaulters, and they could be tracked, and various fake cryptos or scams can be exposed.

Having said that, the regulators, market participants, financial institutions, judiciary all need to work together to make sure that guilty parties don’t go unpunished. If this gets implemented, the data of crypto frauds in 2021 versus 2022 could very well be different. 

7. Regulators & crypto participants both sharing similar sentiments
   

Regulators for now have been rather averse to the crypto markets and they view it as a deterrent to investors. The recently launched BTC ETF has showcased that both can coexist provided that they come on the same page.

We could see a more warming response from the regulators accepting them as a friend just like the other regulated stock markets. Although the regulators in different countries view crypto market being something that is highly volatile and driven by few market players, but it would take a herculean task on the part of the market just to prove that it has become more than just a speculation driven market.