If 2021 was anything to go by, it is that it became the year that cryptocurrencies attracted a lot of interest. However, most of that interest seems to be negative in most of 2022 as Bitcoin and other cryptocurrencies have fallen down the cliff. Bitcoin went from a high of over $60000 and fell to $20000 in June 2022.
The world of cryptocurrency is hard to predict. However, there have been some growing trends that you would not want to ignore.
In this post, we detailed 10 cryptocurrency trends you should be aware of in 2022.
Cryptocurrencies will become attractive to financial institutions
This might be like predicting one could boil the ocean with a water heater. However, events are showing that cryptocurrencies are becoming an acceptable means of buying and selling. This could be seen in platforms like Binance which have users making cross-border payments seamlessly using cryptocurrencies powered by the blockchain.
Bitso recently partnered with Africhange, a platform that helps Canadians send money through cryptocurrency to their families in Nigeria. From the announcement, Bitso and Africhange’s partnership will help Mexicans in Canada to send money to their loved ones in Mexico. This is possible through the power of blockchain.
However, the biggest news of all is that MasterCard would be helping facilitate payments with crypto. The chief executive Michael Miebach made this known while sharing a post on LinkedIn. MasterCard will be doing this through a partnership with Binance. With this, there have been speculations that Visa will join this train. The CFO of Visa had mentioned that Visa would be a key partner in providing connectivity, security, and the likes for crypto users.
It might take a little while but the signs are pointing to financial institutions getting a bite of the cryptocurrency pie.
Cyberattacks Will Increase
In recent years, the spate of cyberattacks has increased. For instance, the rate of ransomware has been on the rise steadily since 2013. The WannaCry malware in 2017 was one of the most publicized cases of ransomware. Victims of the malware were asked to pay $300 in Bitcoin to an automatically generated bitcoin address.
Cryptocurrencies have been the currency of choice for many dark actors due to their flexibility of use and the anonymity it offers.*
There has also been another form of cyberattack that is growing in the cryptocurrency community. Blockchain thought to be impossible to hack has been found vulnerable. Crypto bridges have been found to be the weak point. However, the good news is that it is easily noticeable.
As cryptocurrencies become mainstream, we predict that cyber attackers would want to leverage their ease of use for nefarious means.
Cryptocurrencies will become more energy efficient
Perhaps one of the biggest rap cryptocurrencies have got in the past few years is that their consumption of power is enormous. This has caused many activists all over the world to call for a complete ban on bitcoin and other cryptocurrencies. Ordinary citizens are joining the movement too as 45% of UK residents call for a crypto ban due to its energy usage. Only 18% of respondents do not want it banned based on that reason.
Cryptocurrency platforms have been finding ways to reduce their energy usage. The biggest news recently was the announcement from Ethereum that it will be switching to proof of stake to authenticate transactions. This is a move from the energy munching proof of work protocol. Since Ethereum is the second biggest cryptocurrency after Bitcoin, it shows a step in the right direction for cryptocurrencies as it concerns power consumption.
With public opinion against Bitcoin on its power consumption and its closest competition, Ethereum porting to proof of stake, it is expected that Bitcoin will move to a more energy-efficient method of validating transactions.
Gaming and the Metaverse will Drive Crypto Adoption
Games based on cryptocurrencies have been growing in recent years. Chief among them is Axie Infinity which pays players to compete on the network via collecting pets called axies. The network has grown to be worth hundreds of millions of dollars. There are other gaming platforms based on cryptocurrencies, especially Ethereum where users are getting paid for playing.
One major boost for the crypto world was Meta, formerly Facebook, which announced the creation of the metaverse. Although the concept mentioned nothing about crypto, Meta CEO Mark Zuckerberg has heaped high praises on crypto as regards the metaverse.
With the blowback that crypto has received in the early days of 2022, the metaverse adoption has been kind of slow. However, with Meta’s strong position in the tech world, it is expected to help social media users adopt cryptocurrencies.
NFTs Usage Will Explode
The year 2021 planted NFT into the mind of many crypto enthusiasts and even outside observers. As a representative of the cycle of boom and bust of the crypto world, NFTs went from being the hottest thing in tech to being a pariah. Consider that Jack Dorsey’s tweet that sold for $2.9 million was priced at $6800. That is a loss of over 99%. This has led crypto-skeptics to label NFT as the fool’s gold.
Despite that, there are a lot of potentials for NFTs that would make them mainstream among internet users.
In the future, NFTs would become the best way to certify a transaction. One bold acknowledgment of this fact was in December 2021, the winner and the runner-up of the Miss Universe got NFTs to certify their prizes in the award ceremony.
We might be sticking our neck out on this but we predict that in the future, NFTs would make the most logical sense to lay claim.
Government Will Try to Regulate the Sector
Perhaps one of the main reasons users love crypto is that it is out of reach of the government. However, this is bound to change as many governments have been cracking down on its usage. Some governments have even been trying to adopt it as a reliable payment method.
China is the major power going after cryptocurrencies one can think of. That is not to say Western powers won’t go after crypto. Recent news have shown that states hostile to the West like North Korea and Russia have been using cryptocurrencies as a means to get funds from areas where they could not.
Even at this stage, there are signs of government regulations. Binance and other platforms have KYC requirements where users are to enter their government-issued ID.
The future is going to be interesting, we expect the governments of major nations in the world to go hard on crypto.
Some Cryptocurrencies Will Go Bust
Early into 2022, many crypto enthusiasts thought the year was all blooming for cryptocurrencies. But most of the year has shown the opposite of that prospect. Except for those who sold, most crypto traders have been in the red.
If major and established cryptocurrencies could see dips, then the smaller cryptocurrencies are not safe.
More than 2000 cryptocurrencies have failed since Bitcoin launched in 2009. OneCoin is an example of a cryptocurrency that was touted to be the best thing to happen to the crypto-verse. However, it failed spectacularly as the founder was declared wanted for duping investors.
There might be many reasons why cryptocurrencies will fail in the future. It might be that the founder intends to dupe. Other reasons might include the tech it is built on is not sustainable.
This is a trend that will happen in the future. You should be vigilant so you don’t lose your money when betting on cryptocurrencies.
DeFi will Become Mainstream
DeFi, short for decentralized finance, would become more acceptable in the future. Users would like to without the need for an intermediary. This was more pronounced during the heat of the pandemic as the value of cryptocurrencies that are used in DeFi, especially smart contracts, grew from $2b at the beginning of 2020 to $100b at the end of 2021.
As more users adopt DeFi, it would be betting against the odds to not use DeFi in financial transactions.
Web3 Will Interest Many Internet Users
The first age of the internet had promised. But it was Web 2.0 that changed a lot of things. It allowed ordinary users to appreciate the power of the internet. However, analysts have predicted that Web3 would be the game changer.
For now, no one can describe what Web3 would be. But the one true thing is that the next stage of the World Wide Web will include cryptocurrencies.
In a few years, we would begin to see what it is.
Cryptocurrencies Would Be Favored by Newer Generations
Currently, a lot of millennials own cryptocurrencies in a record amount. Although it is not clear in which direction Gen Z would be on cryptocurrencies, it could be argued that since very few members of Gen Z are financially grown, they would be lacking in this discussion.
However, as time goes on and cryptocurrencies become mainstream, it is expected that both Gen Z and the generation that follows them would adopt cryptocurrencies.
What More?
These are trends that might not come to fruition. However, it is important that you watch it. While we don’t know exactly what the future might bring, we could predict with some accuracy what the future might hold for crypto.
