With rising
chatter about Bitcoin's potential to become the most valuable global asset in
2022, the world’s eyes are firmly trained on crypto and its peers in the
blockchain ecosystem.
Some key
projections to watch out for include:
- NFT market growth likely to continue
NFTs have
helped artists and creators get access to decentralized funding options. As a
result, they get more freedom in financing their creation. Being based on
blockchain technology, NFTs are quite secure and help to authenticate the
ownership of the digital asset. Thanks to such benefits, NFTs are quite popular
among artists and creators. Hence, the crypto market is expected to see an
increase in the valuation of the NFT market.
- Crypto regulations to be in focus
Regulators
across the world spent 2021 assessing the impact of cryptocurrency on the
economy. Central banks from many countries, including India, warned of risks to
financial stability from cryptos. From El Salvador's adoption of bitcoin as a
legal tender to China's ban on crypto-related activities to India's
announcement of a crypto regulation bill soon including a ban on all private
cryptocurrencies, the year 2021 saw a lot of regulatory action. The trend is
expected to continue in 2022. It may also see the introduction of central bank
digital currency (CBDC).
- Web 3.0 expected to enter the mainstream
Web 3.0, the
third version of the internet, is in the works. In Web 3.0, people get to fund
their website without depending on large corporations that own servers and
charge hefty fees. There are many other advantages of Web 3.0 like being able
to personalize the internet and avoiding the occurrence of a single point
failure (a particular social website crashing, for example, will not affect
your activities for the period). The increasing acceptance of Web 3.0 will have
a positive impact on cryptocurrencies such as Ethereum, Livepeer, and Helium
among many other cryptos that are linked to the third version of the internet.
- Bitcoin likely to remain under pressure
Bitcoin is
likely to end the year at a little under $50,000, but that is after making a
fresh high of nearly $70,000 in November. It had started the year at around
$29,000. After the massive gains clocked this, investors expect a bearish trend
in the legacy cryptocurrency in the year 2022.
- Blockchain in the Metaverse
The
Metaverse has been a hot topic recently, with Facebook and Microsoft both
staking claims in this potential online virtual universe, powered by augmented
and virtual reality technologies.
The term was
coined by Neal Stephenson in his cult science fiction novel 'Snow Crash', where
he envisioned virtual, lifelike avatars who congregate in realistic 3D virtual
reality environments.
Notably, crypto, NFTs, and the wider blockchain technology will be key to growing the metaverse, where ownership of identity, utilities, and access to environments will be at the crux of this virtual world.
In the backdrop of the rising participation of global investors, I expect in 2022, crypto platforms that maintain robust compliance and risk management programs will be successful and prosper.
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