While crypto was the hype of every conversation in 2021, who can tell what 2022 holds? Will crypto plummet or soar? Will Bitcoin still be marred with volatility? Will the cryptocurrency drama attract oversight? Which cryptocurrency will top the charts in 2022?
As many concerns as there are around cryptocurrency, there are equally many predictions from analysts, observers, and investors. A lot happened in 2021, and based on that, analysts have tried to chart the future of cryptocurrency in many interesting, scary, and promising ways.
Take a look at some of the top predictions that will likely define the outlook of cryptocurrency in 2022.
1. Crypto regulation
Cryptocurrency regulation is expected to feature prominently in 2022. As the crypto market expands, it becomes harder to ignore the events surrounding it. Interestingly, more institutional investors are eyeing the crypto market as a potent investment vehicle despite the market’s regulation lacking the much-needed firm grip.
That said, most giant crypto investors hope to see some clarity around the gray areas surrounding other cryptocurrencies beyond just Bitcoin and Ethereum. Moreover, stablecoins are also expected to spark massive regulatory interest as investors seek justification over their asset backing.
2. Bitcoin as collateral
Without a credit risk or counterparty risk, most analysts predict the growth of Bitcoin as a viable alternative asset for collateral. Presently, Bitcoin is thriving as collateral in the options market, painting an impressive prospect in 2022 for other markets too.
Additionally, the Bitcoin lending market will see some growth as well. Thanks to its favorable collateralization rate, the top-tier crypto will form an ideal choice for decentralized finance (DeFi) collateral.
3. Bitcoin supremacy threatened
If there is one thing that remains clear from 2021 occurrences, it is that the crypto market extends beyond just Bitcoin. While initially, in 2021, Bitcoin dominated more than half of the entire crypto market share, that dominance has continued to dip as more entrants come into the scene.
In addition to new coin creations, significant growth of smart contract platforms like Solana (SOL), Ethereum (ETH), and Cardano (ADA) has been witnessed. Each of these platforms houses significant projects that altogether drive up their market share. In fact, some analysts strongly assert the likelihood of Bitcoin replacement by newer, faster coins.
4. Adoption of decentralized finance (DeFi)
Crypto is ever-evolving and, in the process giving rise to new, promising concepts such as decentralized autonomous organizations (DAOs) and decentralized finance (DeFi). Think of DAO as a reinvented internet community and DeFi as reimagined traditional financial products that eliminate middlemen.
2021 saw deposits into DeFi services soar astronomically, forming a valid basis for more growth in 2022. Most huge crypto investors are looking to change the centralized narrative that gives only a few entities control over online platforms by taking the decentralized route powered by blockchain technology.
5. Ethereum will outshine Bitcoin
In 2021, Ethereum outperformed Bitcoin by a huge margin. It gained more than six times what Bitcoin gained, painting a promising picture of what is to come. Against that backdrop, analysts strongly believe Etherium will continue to shine. Besides, NFT sales volumes have continued to soar hosted on the Ethereum blockchain.