Doubtlessly, 2021 was an amazing year for cryptocurrency. But what does 2022 beholds for cryptocurrency and bitcoin?
During 2021, we have seen bitcoin reaching its new heights thus increasing interest of people and companies in cryptocurrency. Speaking of, Ethereum reached its new highest value and countries like USA are interested in amending laws and introducing new regulations for cryptocurrency.
Other than that, it is a by-product of skyrocketing interest of people in cryptocurrency. It has become a real hot topic and developing countries are considering it an opportunity to strengthen their economies.
However, it is also an indisputable fact that the cryptocurrency industry is a very infant industry and is constantly evolving. This is the reason that every big jump in the value of the coins is normally followed by big dips as well. Because of its unpredictability, it is hard to predict its future in the long term. However, experts have outlined some themes in which the future of cryptocurrency and bitcoin can be predicted.
First of all, there comes the regulation of cryptocurrency factor. It has been debated a lot if cryptocurrency should be regulated or not. The biggest concerns of the opposing sides are about the security, safety of the investors. However, it is important to note that countries have started to think of regulating cryptocurrency. This is the reason that lawmakers from U.S and around the world are figuring out the ways to regulate cryptocurrency and make it safer.
Antithetically, China banned all types of cryptocurrency transactions in September. This was a huge setback to the crypto industry as it not only affected its scope in China but also in other countries that China influences. In the same way, the discussion of regulation of Crypto in U.S hasn’t been very beneficial for investors as Biden administration believes that more regulations are required. Consequentaly, stricter regulations will severely hurt the interests of the investors.
Another aspect in which the future of Cryptocurrency can be seen is its environmental footprint. There is no doubt that environment has become a very serious concern these days because of the climate change. On the same note, cryptocurrency does not come without any carbon footprint. Infact, Bitcoin mining is responsible for 0.5% of global electricity consumption. This is more power than Sweden does in an year.
As per experts, in 2022, cryptocurrency will face a strong public backlash on environmental grounds. This will further put pressure on lawmakers to enforce more strict regulations. Moroever, a survey conducted by YouGov found that half of Britons want to ban cryptocurrency because of its environmental impact. The same discussion is also present in Scandanavian countries, and if this happens it will lead other countries to follow as well.
Moreover, another area to focus on in 2022 is that central banks are going digital. Banks are realizing that digital transactions are becoming a norm. With this, state-issued digital coins will be in competition with cryptocurrencies in 2022. As blockchain is revolutionizing the bank transfers and it is becoming widely populary because of the advantages it provides.
From Russia to Chille, a lot of countries are considering CBDCs with tests and rollouts scheduled for 2022.
The ending of 2021 introduced a new wave of sales of NFTs. NFTs can offer a proof ownership of digital art to people in same way the physical canvas are owned by individuals. It is vital to know that the idea behind NFTs was to provide ownership to the digital art. However, they have expanded and started to involve other types of digital properties as well.
As NFT sales are growing and setting new records, it is highly predictable that its growth will follow the same trend in 2022.
Conclusively, there is not even a single iota of doubt that popularity of cryptocurrency is reaching new heights which may increase more in 2022. But the challenges that cryptocurrency is facing, are very serious and can lead to strict regulations moving forward. If more regulations are framed, that will potentially affect the interests of cryptocurrency at large.