In 2021, many different cryptocurrencies made huge gains. They also saw drops, and major companies started buying. Bitcoin and Ethereum recorded all time highs, but governments have indicated a desire to create new regulations.
In spite of this, many people have become interested in crypto and it has become more mainstream. They are going to the crypto trading platform of their choice, where it is pretty easy to create an account and get started. Take a look at the top seven possible futures of crypto suggested by experts.
1. Greater Regulation
Back in 2018, cryptocurrencies and bitcoin in particular had a run that took its value up to around $20,000. Governments around the world considered possible regulations, but when prices fell, it was put on the back burner. However, in 2021, cryptocurrencies saw even greater gains. In addition, far more institutional investors jumped in, and regulation has become a hot topic in governments around the world again.
The goal is to establish laws that make cryptocurrency safer and deters criminals from using it. In September, China declared that all crypto transactions are illegal, while in the US, they are discussing using the SEC to police the industry. They also are looking to tax gains. The current lack of guidelines makes it more confusing for large investors, but it is challenging to come up with the best way to do it. There will likely be greater regulation of each crypto exchange platform in the future.
2. Greater Institutional Investment
Mainstream investors started showing an interest in cryptocurrency in 2021, and some invested in both crypto and blockchain technology. Some companies are starting to accept bitcoin or other cryptos as payment, and experts predict that this trend will only grow.
Some believe that large global corporations will get involved, and their adoption of crypto will add credibility for the everyday consumer. Companies such as Amazon and Walmart are recruiting blockchain experts, which suggests that more large companies will become involved.
3. Expansion Into Secondary Markets
Another prediction is that there will be further expansion into secondary markets. Last February, Canada’s Purpose Investments launched the first bitcoin-based EFTs. In less than a year, it has grown to a $1.4 billion fund. This is expected to increase, and other investment firms will do the same all over the world. In addition, individual investors are able to build their portfolio in crypto and borrow against it so that they can stay liquid.
4. Ethereum Competition Will Continue
In 2021, Ethereum showed that it has the power to stand on its own. It operates on the blockchain, and it is used for smart contracts and NFTs. There are other cryptos that have shown that they can perform some of the same functions. They claim that they can do it faster and less expensively. This competition between ethereum and other cryptos will continue, which has convinced investors to diversify their portfolios to make sure that they are covered if another crypto emerges.
5. Big Tech Will Stay Out of it
In the past, big tech planned to get into crypto by creating coins of their own. Facebook, now Meta, has been working on theirs for years, but recently the head of crypto at Meta left. In October, Google announced that it isn’t going forward with its plans.
Big Tech’s departure leaves the door open for the existing cryptocurrencies to continue growth. Big tech has a way of taking over and squeezing everyone else out of industries, but in this case, their withdrawal of their plans allows the existing cryptos to thrive.
6. It Will Continue to Be Volatile
The incredible volatility of cryptocurrencies can make it difficult to see the big picture. With headlines screaming about the latest rise or fall, it is easy to get caught up in FOMO, or fear of missing out. Some people buy or sell in a panic, while others just stay out of it altogether.
However, if you look at the big picture, the crypto market was up in 2021. Even the most recent downturn leaves cryptos higher than they were. There are some experts who say that bitcoin could hit $100K in 2022, but people need to understand that there is likely to be great volatility in the process. That has been the trend, and experts expect it to continue.
7. More Widespread Adoption
In June of 2021, El Salvador became the first country to accept crypto as legal tender. Experts expect further advances in the adoption of cryptocurrency. Although it could take different forms, financial institutions are expected to warm up to crypt because customers expect it.
More people want to have crypto as part of their portfolios, and banks and other financial companies will have to work with it to keep their customers happy. The reality is that people want to buy crypto, and if banks don’t offer it, people will go where they can get it.
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