In 2022, all digital assets, including cryptocurrencies, experienced a significant decline. The FTX crypto exchange recently collapsed, sending shockwaves across the crypto industry as worried investors withdrew their assets and caused the exchange to fail totally and file for bankruptcy.
Considering those facts as well as the other terrible events of 2022 in crypto space, many people ask themselves — is crypto dead? Does it still have a future? Despite the current mood among investors, several positive signs could mean that the crypto sector will recover, rise again, and have a more stable future.
Why Is There Still Optimism?
Most investors now realize that greater scrutiny by government watchdogs is inevitable. For some time, the issue of cryptocurrency regulation has been a controversial one, but now many people in the industry believe that it would be beneficial for both investors and the sector as a whole if greater regulation were to be implemented.
As long as the regulation finds the proper middle ground, it will have the potential to protect investors, help to prevent fraudulent activities inside the crypto ecosystem, and give clear guidance to enable businesses to develop within the crypto economy. Effective regulations benefit the community as a whole.
Another promising indicator for the future is the perspective of large institutions such as banks and hedge funds on crypto projects. Although things may appear gloomy nowadays, many investors see it as a chance to “buy the dip” and claim that the main idea of this technology has not disappeared and will continue to develop.
Although the year 2022 was not a good one for the cryptocurrency industry as a whole, there are a number of promising new initiatives that emerged this year. Let’s emphasize those that are showing signs of potential for future growth.
The Most Promising Crypto Projects of 2022
Ethereum is the first-ever platform to support the use of smart contracts. As a smart contract platform, Ethereum is used to run decentralized applications (dApps), which are sophisticated blockchain-based software that can be accessed from anywhere, by anyone, at any time. The platform is presently the main smart contract platform, including over 3,000 dApps operating on the blockchain and billions of dollars managed by Ethereum DeFi services. In spite of increasing competition from other smart contract platforms like BNB Chain and Avalanche, Ethereum remains on top, especially after the major upgrade in the middle of September.
The upgrade, known as “The Merge,” made sure Ethereum switched from its previous Proof-of-Work consensus method to the far more sustainable and eco-friendly Proof-of-Stake system. In addition, it will pave the way for a number of future enhancements that may cement Ethereum’s place as one of the most cutting-edge blockchains in the world. As a result, ETH is among the most powerful cryptocurrencies of this year, which might lead even governments to adopt this system. ETH has always demonstrated significant potential for investors. But in recent years, business is also becoming increasingly engaged in using the Ethereum network.
Despite the shaky market, Decentraland, a crypto metaverse project, is becoming more and more attractive. This “hype” was partially brought on by the NFT and metaverse mania, which also helped the platform’s native coin, MANA, see significant gains. But the metaverse contains more than simply showing off your NFTs. As its main feature, you can buy virtual land, create virtual games, work on countless projects, or enjoy various activities.
Commerce also has an interest in metaverse ventures, as demonstrated by several significant corporations that have expressed interest in and purchased property in this particular metaverse. Despite the fact that MANA has declined significantly along with all the other assets this year, there are still solid indications that patient investors with a high tolerance for risk could ultimately get a return on their investment while waiting for commerce to partake in the metaverse more actively.
Decentralized finance (DeFi) is one of the vital sectors of the developing crypto world, where Uniswap decentralized exchange is holding its position steadily at the center of this new ecosystem. The Uniswap platform is a dApp based on the Ethereum blockchain, which enables the exchange of ETH to other ERC-20 tokens.
But why is Uniswap among other DeFi projects that show perhaps the best future potential? Firstly, the platform’s user-friendliness and advanced integration with the Metamask wallet. Secondly, users are in complete control of their private keys. Thirdly, it’s an automated market maker with an open-sourced code with no order book or intermediaries. That’s why this decentralized platform makes the process of exchange smooth and easy. Other decentralized exchange interfaces are simply not as intuitive as Uniswap’s, which indicates that the continuous development of this project promises solid growth of its UNI token in the future.
APE was created during the “bloody” year 2022. This project creates ERC-20 tokens that are both utility and governance tokens. Holders get access to games and other projects and services that are exclusively available to Apecoin owners. They may also take part in working on the Ape ecosystem.
The company that created the well-liked Bored Ape Yacht Club non-fungible tokens, Yuga Labs, is behind Apecoin. At its peak, Yuga Labs collected more than $300 million through a virtual property auction that let owners of APE tokens buy properties in Otherside, yet another metaverse. APE tokens are also being taken out of circulation to drive up the price. So if the project survives the current bear market, purchasing APE at the “discount price” could pay off in the long term.
What projects show potential for long-term investment?
Play-to-earn games are a broad category of online games that bring together variations of digital farming, MMORPG, battle games, tower defenses, and other models. The goal is to play the game and earn crypto assets, with the potential to sell them on the open market. Most games also use non-fungible tokens to assign in-game items, which also hold value and can be resold.
The Axie Infinity model, one of the most popular play-to-earn games, together with other similar projects, rely on two unsustainable factors — a crypto bull market and a constant inflow of new players and buyers.
As of today, it is clear that the play-to-earn model has challenging times ahead to be sustained. The number of players and net earnings fell off a cliff due to the ongoing bear market. But during the period when Axie Infinity was leading the hype, other games started to appear almost daily, hoping to copy the model. Similar games showed success in terms of the number of players and overall popularity. But the games also had to raise their protection against bots as well as two factors mentioned above.
Nevertheless, the NFT market is currently far from being in demand. Things must first shake-up in the crypto world, and only after that might it become attractive for investors to return.
Metaverse is a virtual-reality realm where users can interact with a computer-generated environment and other users. Metaverse has been said to be the next big thing recently, especially after Facebook rebranded its name to Meta and Mark Zuckerberg’s commitment to the metaverse. His belief in the metaverse’s future is shared by others as well. Many companies have been joining this “hype train,” including non-tech companies as well. Firms like Nike, Louis Vuitton, Balenciaga, and others are also developing their own blockchain projects.
But how can joining the metaverse make investors profitable?
Besides selling the hardware supporting the metaverse, such as VR headsets, chips, etc., there are numerous predictions that there will be a higher demand for what’s in the metaverse itself.
The metaverse is simply another world where people can develop their new character. Similarly to the real world, people are able to customize their appearances, be entertained, buy houses and cars in the metaverse and name it. And that is also how money can be made within the metaverse. That said, the metaverse is promising in the long run, with many major companies working on their unique projects or using already developed ones so they can enhance engagement in the metaverse activities.
Forecasting the future of cryptocurrencies is more complicated than it has ever been. The crypto market is still complex, but by keeping an eye on how trends develop, you can optimize your investment judgments as the market develops.
Market participants should definitively pay closer attention to several crucial details, such as regulation in the U.S. and abroad, international adoption of crypto payments, exchange-traded funds using cryptocurrencies, the attractiveness and perspective of new projects within this space, further development of the metaverse, and so on.
The future of the crypto industry will take a more clear form when these problems are solved and addressed by regulators. While governments and major companies get increasingly interested in their long-term crypto plans, the crypto realm will begin to take a brand-new shape sooner or later.