Cryptocurrency is fast changing the world as we know it. More and more countries are beginning to accept Bitcoin, crypto’s biggest currency as legal tender. Opportunities in the crypto market are beginning to increase exponentially.
As with other markets, there are certain trends that should be expected of the crypto market. In this short piece, we discuss three important predictions for the crypto market this year.
Investor Adoption:
Some of the biggest companies in the world have invested in Bitcoin. Elon Musk’s Tesla invested about USD1.5B in Bitcoin in 2021. Block Inc (formerly known as Square) has also reportedly invested more than USD200M in Bitcoin. These companies are only a handful that has invested in cryptocurrency.
If cryptocurrency enthusiasts thought these investments were heavy, recent trends show that they are just the tip of the iceberg. If the trends are anything to go by, investments in cryptocurrencies will continue to increase in the second, third, and fourth quarters of the year. Perhaps what is even more exciting is that these investments will be made by companies and regular people, with experts predicting that one billion people will own Crypto by the end of the year.
Decentralized Finance (DeFi):
One of the reasons why Cryptocurrency has continued to gain traction is its use of DeFi. This ensures that the middlemen in financial interactions are dissolved. Thus, the blockchain on which crypto dwells ensures that third parties are eliminated from transactions. As it stands, all indications point to the fact that the Decentralized Finance area of cryptocurrency will grow in leaps and bounds this year.
The growth of Web3.0 which is predicted to take the control of websites away from some companies will also help drive the growth in DeFi this year. With USD200B made in deposit to DeFi services in 2021 alone, experts believe 2022 will see more demand in such DeFi services and financial transactions.
Regulations:
Cryptocurrencies like Bitcoin are being accepted as real digital assets and money in countries worldwide. The boom and development the crypto market has seen also mean that more and more governments are becoming interested. This interest means two things, investments and regulations.
Regulatory agencies worldwide are beginning to look into the pie of the crypto market. As such, regulations might increase, particularly in the legal aspect where certain clarifications still need to be made on issues like smart contracts.
However, while these predictions seem interesting, the crypto world and market are as volatile as volatile get. One minute, currencies are high on the charts, the other, serious losses are being made.
So, these predictions are merely what they are, predictions. And if there is anything the crypto enthusiasts need to know, predictions are not always as they seem.
Photo by Olya Kobruseva from Pexel