We've been keeping a close eye on several issues that we believe will dominate the crypto space's news cycle over the next year. The year 2021 has been exciting for cryptocurrencies, with markets experiencing wild swings and new sectors generating interest. While we cannot predict what will happen in 2022, a variety of scenarios could occur that would be rather interesting, in both positive and negative ways. Let's take a look at what could be the top crypto trends for 2022.
Increased Adoption of Cryptocurrency
As is the case with each year, there is little question that cryptocurrency, as well as crypto payments, acceptance will increase in 2022. The market achieved significant milestones this year, with El Salvador leading the charge by legalizing Bitcoin. Since then, the country has launched several projects with the government's support, which is a staunch supporter of Bitcoin.
El Salvador's government is now exploring the possibility of establishing a Bitcoin City. The government has been purchasing additional Bitcoin, taking advantage of current market troughs to build up its reserves and position itself for significant returns when Bitcoin's price rises in the future.
Other countries are likely to follow suit in 2022. Businesses might also accelerate Bitcoin adoption by following Tesla and MicroStrategy's lead and adding Bitcoin to their reserves. This will only serve to raise the prominence of cryptocurrencies even further, establishing them as real alternative assets on a par with gold, precious metals, and a variety of other assets.
Finally, increased adoption benefits the market. Individuals who have been skeptical of crypto will have additional reasons to invest, especially when they learn about the benefits of digital assets to economies and countries.
Cryptocurrency ETFs
For the next crypto trends and news we introduce the crypto ETFs trading launch in 2022. The United States Securities and Exchange Commission (SEC) approved the operation of a bitcoin futures electronic trading fund (ETF) called BITO, managed by ProShares, on US stock exchanges in October 2021. This decision not only enabled the first crypto-based ETF to trade on exchanges, but it also helped propel bitcoin to an all-time high of $68,789.63 on 10 November. It is critical to highlight that this was not traditional bitcoin trading on stock exchanges, but rather bitcoin futures. This means that individuals are engaging into contracts committing to acquire and sell cryptocurrency at a specified future price.
This was nonetheless significant news, since it fueled speculation that US regulators would authorize a so-called spot ETF. If approved, this would enable anyone to invest or trade in cryptocurrencies directly, without first visiting a cryptocurrency exchange. The SEC denied the Chicago-based Cboe (BZX) exchange authorization to operate a planned spot bitcoin fund on 12 November, citing concerns about fraud. Having said that, it is possible that a spot ETF will be approved in the future. If that occurs, it might pave the way for a significant increase in crypto investment in the United States.
Although we are not quite there yet, the prospects of a cryptocurrency spot ETF getting approved for trading in 2022 must appear high.
The Inception of GameFi
GameFi is poised to become the next best crypto trends, following in the footsteps of decentralized finance (DeFi), non-fungible tokens (NFTs), and much more. It is the progression of gaming, as platforms transition to a pay-to-play model.
Over the last few years, it has become increasingly clear that gamers want more than just to sit at home and play games; they want to earn money and support themselves. GameFi supports this in a variety of ways.
GameFi platforms enable users to engage in gaming while earning rewards for completing tasks. These rewards can include avatars, new weapons, and features. The majority of these benefits are in the form of NFTs, which can be traded on third-party marketplaces or internally. As a result, players earn money as they progress through the game.
Numerous games already incorporate the GameFi model. The Axes Metaverse is a battle royale game, developed by Azur Games, that allows players to earn NFTs while battling in a dedicated metaverse.
By 2022, additional games should embrace this strategy and further incentivize their players. Everyone appreciates the ability to play games while earning money, so this is a win-win situation.
Stablecoins' Next Generation
Another development worth noting in 2022 is the next generation of stablecoins. Due to the extreme volatility of cryptocurrencies, many potential investors are scared off by the prospect of large-scale losses. Stablecoins, which are fixed to fiat currencies such as the US dollar, are intended to offer the best of both worlds, as they run on the blockchain but are not subject to market fluctuations. In 2021, tether (USDT) and USDC dominated the market, expanding by about 300 percent over the course of the year and amassing around $100 billion in combined market capitalization.
Both, however, have one significant flaw. USDT and USDC are not decentralized. Both stablecoins are backed by individuals or businesses, and there is no way to determine where the money is invested. This means that if the stablecoin reserves are put in traditional stocks, they may lose their peg to fiat. Thus, by 2022, we may see the introduction of further stablecoins that are algorithmically tied to fiat. Due to the fact that certain coins, such as DAI or USD coin, are decentralised, they are possibly less susceptible to market occurrences. Perhaps 2022 will be the year when these next-generation stablecoins capture a larger share of the market and establish themselves as major crypto trends today.
