In 2021, nearly every cryptocurrency hit record highs and delivered considerable gains, but in May the market took a plunge. Then in September, China continued to tighten its reign on cryptocurrency before ultimately banning all transactions. Bitcoin harnessed the spotlight as El Savador announced Bitcoin would become legal tender in its country. Meme tokens garnered a cult following, and NFTs continued to cause a frenzy as Beeple’s “EVERYDAYS: THE FIRST 5000 DAYS” sold for 69.3M. After a banner year for digital assets, what can we expect to see in 2022?
Cryptocurrencies are slated to continue breaking new records. Will Ether outperform Bitcoin once again? In 2021, Bitcoin was up 66% compared to Ether’s impressive 418%. As the NFT market continues to rocket, we anticipate Ether will continue to show gains since the majority of these tokens run on the Ethereum blockchain. After undergoing critical updates, the network has also increased its capacity to handle more transactions further supporting this hypothesis.
Spikes in stock market volatility showed patterns of Bitcoin sell offs; expect to see short term effects on Bitcoin’s price as fear in traditional financial markets prevail. Bitcoin is the oldest and largest cryptocurrency in the world (having just celebrated its 13th birthday) and remains the most widely accepted benchmark for the crypto market.
Adoption of blockchain infrastructure by banking and financial institutions remains on an upward trajectory. Leaders in the industry have already implemented blockchain technology that is interoperable with their existing systems. Key players in payments and fintech are also coming to the table and investing heavily in blockchain technology. Innovation will continue to erupt in fintech, supply chain management, and almost every other industry where blockchain technology can be applied.
As central banks further explore the adoption of a national digital currency, plan for shifts in cryptocurrency regulations as more government agencies and regulatory boards dive deeper into blockchain.
Efforts to make the blockchain space more sustainable continues to be a priority, as more green initiatives develop. Proof-of-stake protocols consume ~99.5% less energy than Bitcoin’s proof-of-work model. Prepare to see proof-of-work models shift to proof-of-stake.
The race to the metaverse has become the present day version of the space race. Centralized and decentralized metaverse concepts have emerged from players like Zuckerberg and the Winklevoss twins. Blockchain tech will remain essential to the function of these metaverses and enable their performance.
NFTs & Web3 will continue to evolve and mature as widespread adoption follows suit.
Bankers, developers, creatives, and government agencies (amongst others) are heavily investing in blockchain technology in 2022. With blockchain acting as the backbone of these far reaching initiatives, expect significant transformation in the blockchain industry over the remaining 360 days of 2022.
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