2021 was a great year for the crypto market. Top cryptocurrencies like Bitcoin, Ether, BNB, Cardano, and many others all hit new all-time-high or ATH as it’s commonly known. But towards the end of 2021 many crypto influencers believed that Bitcoin would hit $100,000 and Ether $10,000 unfortunately neither of these happened.
2022 has now been positioned as the year Bitcoin would finally hit $100,000 but so far it doesn’t seem like this will happen. Let’s take a look at the what the crypto market holds for us in 2022.
Crypto Market Overview for 2022
1. Cryptocurrency regulations: this has been a topic of interest over the years but every year the much talked about cryptocurrency regulations don’t seem to happen despite interests from governments around the world. Already some countries have enacted the tax on cryptocurrency gains and transactions. India was recently in the news for this reason, and just recently it was reported Portugal will now tax crypto.
But in reality taxing cryptocurrency transactions, trading and gains don’t in the real sense translates to regulations. A much more vibrant framework is needed to regulate crypto activities that will not stifle innovation. In the past year, we have seen so many people lose their hard-earned money due to rogue individuals in the cryptocurrency industry.
Recently Luna Guard Foundation and its CEO Do Kwon were in the news following the de-pegging of the Luna Guard Foundation issued stablecoin US Terra or UST, which is supposed to maintain a 1:1 ratio against the US Dollar but unfortunately it is currently trading at $0.18.
Investors and holders of the UST stablecoin and LUNA token lost millions of dollars and there have been calls for proper investigation into what happened. This issue has also renewed the calls for proper crypto regulations to avert situations like this where many people lost their life savings.
2. NFTs: Non-fungible tokens or NFTs were the trend of 2021 and we saw many organizations jumping on the NFT trend. Collectors and speculators were buying and selling digital art or NFTs for thousands to millions of dollars. We even saw sportsmen like Neymar and Steph Curry all buying NFTs.
Unfortunately here in 2022, the NFT trading volume has dried up and most collectors that spent millions of dollars to buy some NFTs and now stuck with it. For instance, Crypto entrepreneur Sina Estavi made headlines in March 2021 when he paid $2.9m for an NFT of Twitter boss Jack Dorsey’s first tweet. But his efforts to resell the nft only got a top bid of $6,800.
3. Institutional interest: Mainstream adoption of cryptocurrencies has always been an area of interest for crypto enthusiasts. 2021 was the year we witnessed the highest adoption of cryptocurrency by mainstream companies. Through the financial filling of Tesla, we were able to see that they invested in Bitcoin.
Fintech companies like Square and PayPal have also shown their interest in Bitcoin and other cryptocurrencies. The year 2022 will be the year more mainstream companies add crypto as a source of payment for their good and services. Although there have been genuine concerns about the volatility associated with the value of cryptocurrency assets.
4. Exchange Traded Fund (ETF): The United States SEC approved several Bitcoin ETFs in 2021. Although all the Bitcoin ETFs approved to date are all futures-based and there have been calls for the United States SEC to approve a Bitcoin spot ETF. Before 2021 all Bitcoin ETFs submitted have either been delayed a decision on, rejected, or withdrawn by those that filed for it.
The first-ever Bitcoin ETF was approved in 2021. While this marked a turning point for the crypto industry, we expect the United States Securities and Exchange Commission to approve a Bitcoin Spot ETF in 2022.
We expect the Crypto market to grow exponentially putting all these metrics into consideration. The NFTs market is still in its infancy and there’s a lot more to look out for regarding NFTs with the introduction of NFTs into play-to-earn games. This will open up a new gaming economy where players can also benefit financially from playing games.
Another important metric is the growing institutional interest in cryptocurrencies. The government of Dubai just issued its first crypto license and has created a free trade zone for crypto. The Central African Republic (CAR) now recognize Bitcoin as a legal tender, following in the footsteps of El-Salvador.
In regards regulation of cryptocurrencies we believe regulators are working hard on a framework and towards the closing part of 2022, we should see some regulations in place to safeguard crypto investors.
Finally, we believe we will witness an exponential growth of the crypto market in 2022 much bigger than we saw in 2021, with Bitcoin and other cryptocurrencies hitting new all-time-highs.