2021 has been no less than a historic year for cryptocurrency. Many milestones and events occupied the crypto headlines in 2021, including El Salvador becoming the first country in the world to recognize Bitcoin as legal tender, the rise of NFTs, the growth of DeFi, many private banks like Morgan Stanley and J.P. Morgan launching Bitcoin and crypto products, approval of the first US ETF linked to bitcoin and the concept of the metaverse bursting into the mainstream.?
Even when we look back at the performance of Bitcoin, it has had a pretty good year, with the digital cryptocurrency up nearly 70% since the start of 2021, thus anchoring the entire crypto market to a combined $2 trillion in value.
However, roadblocks such as Ethereum¡¯s legacy issues, from scalability struggles to exorbitant fees, lack of clarity surrounding Web3, etc have also been the talk of the town this year. Even at the global level, there¡¯s a lot of uncertainty surrounding what the cryptocurrency industry holds for the future after another rollercoaster year. So, let's have a look at some of the top crypto predictions for 2022, by some analysts.
Some experts believe bitcoin is due for a sharp decline in the coming months. After hitting a record high of almost $69,000 in November 2021, bitcoin is now sitting close to $50,000, down almost 30% from its peak. As per Carol Alexander, a professor of finance at Sussex University, bitcoin can tank to as low as $10,000 in 2022, hence virtually wiping out all of its gains in the past year and a half.?
Moreover, she warns us of history repeating itself. In 2018, bitcoin tumbled close to $3,000 after climbing to a high of nearly $20,000 a few months earlier. So, will bitcoin crash in 2022? It certainly remains to be seen as the year unfolds.
Also Read:?Former Twitter CEO Jack Dorsey Says Bitcoin Will Replace The US Dollar
As the crypto industry has evolved, bitcoin¡¯s share of the market has been waning, with other digital currencies like Ethereum looking to play a much bigger role. This is indeed something analysts tend to expect to continue into the next year.
Also, emerging crypto developments such as decentralized finance and decentralized autonomous organizations are likely to be the highest growth areas of crypto, as per Bryan Gross of crypto platform ICHI. With total money deposited into DeFi services surpassing $200 billion for the first time in 2021, experts predict its demand to grow further in 2022.
Also Read:?WhatsApp Starts Trials For In-App Cryptocurrency Payments In The US
Numerous regulators flexed their muscles on cryptocurrencies in 2021, with China completely banning all crypto-related activities, and the U.S. authorities cracking down on certain aspects of the crypto market. In line with this, analysts widely expect regulation to be a key issue in 2022 for this sector, with the interest from various governments like the US and India keen to bring regulation into the crypto space.
Also Read:?Elon Musk, Jack Dorsey's Twitter War: Web 3.0 Already Lost To Capitalism?
The Web3 movement is expected to take the center stage in 2022, as per analysts. For the uninitiated, Web3 calls for a new, decentralized iteration of the internet encompassing blockchain and cryptocurrency technologies such as nonfungible tokens (NFTs). It has, however, already found sceptics in the likes of Elon Musk and Jack Dorsey.
But as per many experts, the significance of Web3 will continue to grow into 2022, with the focus on extending user utility in a decentralized capacity, and naturally, place users as the central focus within the emergent technology.
For more of such interesting financial news,?click here.
Click here?to download CRED.