There is no denying that 2021 was the year when cryptocurrency went mainstream. Even with a few bad moves to counter the booms, Bitcoin has been accepted as a financial asset rather than a fantasy, libertarian money project. Cryptocurrency has taken on its true meaning, showing governments, financial institutions and businesses in general how it can be a boon to the economy and bottom line. Non-fungible tokens (NFTs) bring blockchain technology into mainstream culture, attracting buyers not interested in financial cryptocurrency. And millennials are no longer the only ones accumulating as investors.
So, without further ado, here are 10 predictions of what 2022 will hold in store for crypto.
Crypto is becoming (more) mainstream: Estimates of the number of Americans owning or having owned crypto vary widely, but the range of 12% to 13% seems to be where the most unbiased polls lie. High net worth and institutional investors seem to be piling up as the investment choices offered by banks, hedge funds and other advisers multiply. The main street is another story. Bitcoin may be in the doldrums when it comes to prices right now, but it’s getting easier for average people to buy the biggest cryptocurrencies thanks to Square, PayPal, Venmo, Robinhood, and other options. that don’t require signing up for a trading account or buying a cold wallet – or knowing what a cold wallet is – are mushrooming.
See also: In 2021, Crypto prepared for its close-up
Altcoins are ready for their big plan: Bitcoin and ether are increasingly well known, at least among millennials / Gen-Zs and the crypto-curious crowd. As BTC and ETH become more and more common as investments, the interest in investing in other cryptocurrencies from the top 10 to the top 25 will increase. Expect to hear about Solana, Cardano, Polkadot, Avalanche, Polygon, Algorand, and other serious bullion coins. We would like to say that the result of this is dogecoin and its fierce supporters like Shiba Inu will disappear, but expect to see Elon Musk continue to successfully push the joke coins into some serious territory.
Read more: Is Paxos the new Diem? Stablecoin issuer’s Facebook pilot has just been extended to 2 billion WhatsApp customers
Stablecoin regulations explode: The announcement in December that Meta-owned Novi Wallet is piloting Paxos stablecoin payments on WhatsApp, the messaging app for Mark Zuckerberg’s two billion customers, is not much different from Facebook’s adoption of stablecoin Libra. / Diem. The prospect of this non-national global currency becoming available to Facebook’s 2.3 billion customers made politicians, treasury and finance ministry officials, and central bankers around the world apoplectic in 2019. They feared it might undermines national currencies and government control of financial systems. , make virtual bank rushes more likely and generally trigger a locus plague on financial institutions. They will soon realize that Paxos / WhatsApp is nothing more than a name change, and the regulatory hammer will fall.
See also: The Battle of Stablecoins vs. CBDCs is really two smaller wars that also fight each other
The digital dollar is coming: There are already many signs that countries around the world are taking central bank digital currencies seriously – essentially a nationally issued digital legal tender that rivals stablecoins and payment cryptocurrencies – Jamaica announcing the first quarter deployment of a digital currency and Mexico aiming for a 2024 launch of a digital peso to start the new year. Most major economies and major developing countries, from the EU to India, are seriously considering retail and wholesale CBDCs – in fact, almost everyone except the United States. That will change by February, when China deploys its digital yuan in the world’s second-largest economy. (third if you count the EU as a single entity) and the argument that the United States lags behind its greatest economic, political and military rival becomes real to the entire electoral population. Treasury Secretary Janet Yellen is undecided and Fed Chairman Jerome Powell sees no need. The Fed will be dragging its heels, but a digital dollar will go from “if” to “when” in 2022.
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The SEC will get the crypto authority: The U.S. Securities and Exchange Commission (SEC) will likely get the formal cryptocurrency supervisory authority President Gary Gensler wants, instead of a new agency, but with its wings cut off. The SEC will be pressured by Congress to give a looser, more innovation-friendly definition of when a cryptocurrency is – and more importantly – security, likely giving the Commodity Futures Trading Commission (CFTC) some monitoring role.
See also: Sen Lummis’ Christmas gift to Crypto: clear regulations for the New Year
Crypto Takes Big Finances: The biggest banks and financial institutions are offering bitcoin investments to their high net worth clients, offering custodial solutions and considering adopting crypto for downstream settlements – some privately like JPMorgan Chase with the corporate stablecoin blockchain JPM Coin , others using commercial solutions like the international payment company Ripple, and still others wholesale CBDCs. The crypto and blockchain departments of financial institutions and investment firms are on a hiring wave, and executives understand they need to understand this. And government regulators around the world are planning how to regulate crypto – at the retail and institutional level – rather than killing it.
Read more: JPMorgan to power payments for Siemens using private blockchain
Bitcoin-as-currency will fade: It may break Jack Dorsey’s heart, but bitcoin and all other unstable cryptocurrencies are just too volatile to be used as day-to-day currency anywhere the economy hasn’t collapsed completely – we’re looking at you, El Salvador and yours, Tesla. Between stablecoins and CBDCs, Bitcoin creator Satoshi Nakamoto will lose the payments battle, but his technology – blockchain – will start winning the war.
See more : Twitter, Jack Dorsey, CEO of Square, bullish on Bitcoin
DeFi will be co-opted: We’re going to be crypto-skeptics here. Decentralized finance will show it has legs and is booming this year, but the legs will slowly be cut from under it in two ways: First, regulation. It could be a multi-year process, but governments don’t like financial markets they can’t control. They may or may not prevent decentralized exchanges and lending platforms from existing, but they can certainly make their use illegal. (One caveat: if DeFi becomes a partisan issue backed by the GOP and fought by the Democrats, it will take much longer.) Second, financial institution (FI) intermediaries will embrace the blockchain tools that give DeFi a much of its advantage, but with the benefit of centralized management. Either way, consumers will benefit for once.
A corollary of this is that DAOs – decentralized autonomous organizations that allow decentralized governance models – will be more widely adopted. Look more towards ConstitutionDAO than towards lending platforms, because truly transparent governance has many uses.
Read more: DeFi is the new big thing in crypto. But what is it? Here’s all you need to know
NFTs will permeate culture: Non-fungible tokens have too many potential uses in fields ranging from the arts and games to legal and financial fields like real estate and asset tokenization. In addition, there are many benefits to the people who should adopt them: Artists and musicians could integrate automated royalties with the resale of anything they produce, while real estate sellers can significantly expand their pool of buyers to all. levels by splitting ownership via NFT tokenization.
See more : PYMNTS NFT Series: What Are NFTs & Why Are They The New “Next Big Thing?” “From Crypto
Metaverse will show they have legs: The interactive nature of the Metaverse as a platform for social interaction, commerce, recreation, education and politics will make them an increasingly important part of the economy and culture. They may or may not be decentralized, but they are happening. That said, Facebook won’t dominate the metaverse. It’s too unsightly and too suspicious to go fast and smash things over.
See also: What is a metaverse and why do we organize a fashion show?