5 crypto trends to follow in 2022

Written by Anna Komashko
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5 crypto trends to follow in 2022

Cryptocurrencies had a tumultuous but profitable year in 2021. The market capitalization has tripled since January 1, from about $800 billion to about $2.2 trillion today, and some assets have seen massive price growth and users.

And the gains were spread throughout the ecosystem, with Bitcoin and Ethereum accounting for just over 60% of the market valuation, up from 80%. Furthermore, the success of DeFi (decentralized finance) applications and non-fungible tokens (NFTs) suggests that this year will be even more beneficial. Here, five big crypto topics to pay attention to in 2022.

1. Regulation

Due to its decentralized structure and unregulated nature, the crypto industry has thrived, even though many in the industry will say they are open to the laws as long as they are fairly applied.

Governments have tried to regulate them in ways that increase investor safety. The regulations may lead to clearer tax guidelines for investors, as well as the opportunity to incorporate crypto investments into retirement funds.

Furthermore, if well-known cryptocurrency trading platforms comply with the laws, they can help increase adoption by offering an additional degree of security to investors.

2. The number of Bitcoin ATMs is increasing

The intangibility of cryptocurrencies has long been a drawback; Many people find it difficult to recognize Bitcoin as genuine money since they cannot see or touch it.

People will be able to perceive digital assets as tangible financial tools now that Bitcoin ATMs are becoming a reality in many regions of the world.

These kits allow customers to buy bitcoins with their credit or debit cards. This makes cryptocurrencies extremely accessible to both enthusiasts and newcomers.

3. Improvements for the environment

The environmental impact of blockchain networks has been a point of attention for cryptocurrency skeptics and the issue has even plagued some cryptocurrency fans.

Bitcoin mining requires a large amount of power, which consumes a significant amount of energy.

With coins that use proof-of-work for their mining process accounting for most of the market capitalization, a significant change in energy costs is unlikely in 2022.

And not only is it energy-intensive, it also generates a large amount of electronic waste from discarded mining equipment.

4. Bitcoin price will continue to fluctuate

Bitcoin, the most popular cryptocurrency in the world, has a price that remains the benchmark of the cryptocurrency market.

Since the cryptocurrency market is not yet fully mature, this volatility is likely to continue into 2022 and beyond.

Many savvy traders enjoy Bitcoin due to its volatility, which allows for arbitrage opportunities, however many asset managers urge caution and encourage clients to put only 5% of their portfolio in crypto. Investors in Bitcoin should expect it to crash as often as it rises.

5. Approval of cryptocurrency ETFs

When BITO, the first Bitcoin futures ETF (exchange-traded fund), debuted on the New York Stock Exchange earlier this year, it attracted some $1 billion in trades on its first day, putting it on track to set a new high.

However, BITO does not own any Bitcoin; rather, it is a way for ordinary investors to gain exposure to Bitcoin futures rather than genuine Bitcoin. However, based on the performance of the BITO and the confidence investors have in it, it seems quite likely that a Bitcoin Spot ETF will be approved in 2022 or very soon after.

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