NFT, stablecoins and the value of Bitcoin: forecast for crypto assets in 2022

[ad_1]

The views and opinions expressed in this article are those of the author.

Blockchain and crypto assets have made huge strides in 2021 in virtually every way, so it makes sense to look back on the main achievements of the year, and look ahead and see what 2022 might bring. .

The current year hasn’t necessarily got off to an amazing start for the global crypto asset space, as the rally that took crypto to all-time highs in Q1 2021 has slowed significantly as the year continued. to progress.

After this cooling period (which, ironically, occurred during the hottest summer months, at least in the northern hemisphere), the price rebound returned, with new all-time highs reached in the fourth quarter of 2021. before a certain decline at the end of the year. .

As exciting as price volatility is, and it can certainly generate quite a bit of buzz, focusing exclusively on price action and charts can overshadow the many important events that have occurred in 2021.

Major Market Events in 2021 The first Bitcoin exchange-traded fund (ETF) has been approved to start trading in the US stock markets, a major victory for crypto advocates, and although it is linked to futures contracts against Bitcoin itself, this is an important step forward towards mainstream adoption. The Central Bank of China (CBDC) digital currency, which was initially launched as a pilot in late 2020, continued to proliferate and was used by more than 140 million domestic users during the year. Although use remains limited to domestic users at this stage, the volume of transactions is worth noting. The crypto asset market topped a market cap of over $ 3 trillion (€ 2.66 billion), an incredibly rapid increase considering that the industry only emerged in late 2008. Major payment processors, including Visa, Mastercard, Square, and PayPal, have introduced and / or expanded crypto payment options for individuals and institutions, including allowing Bitcoin-denominated payments, throughout 2021. achieved what, at the time, was the largest purchase of Bitcoin by a U.S. publicly traded entity, totaling $ 1.5 billion (€ 1.33 billion), sending shock waves in public procurement and attracting the attention of regulators around the world. Financial institutions, from BNY Mellon to JP Morgan to Morgan Stanley, to virtually every major financial institution in the world have started offering crypto services to individual and institutional clients.

In other words, it’s clear that 2021 has been a year or more of individual and institutional adoption, with the pros and cons that such massive adoption would bring in the future.

Regulation and regulatory attention have increased alongside the rate of adoption of blockchain and crypto assets.

Depending on the perspective of the individual or company in question, attention can be seen as a positive or negative development, but whatever attention it takes, that attention will certainly be a driving force for moving forward. .

As the timeline moves to 2022, it’s worth taking a look into the future and seeing what some of the trends and events might be as regulation and adoption accelerates across the world.

This coming year may well be the year crypto – from politics to various applications – truly matures and enters mainstream use.

What 2022 will hold in store for the industry

Central banks will play an increasingly leadership-focused role in the development of crypto assets, whether or not Bitcoin maximalists agree with this development.

The rise of central bank digital currencies (CBDCs) has sent shock waves through the crypto asset community as, in 2020 and 2021, the investment and attention paid to this possibility has increased rapidly.

The potential for improving payments is significant, but must be weighed against the risk of government drift and the possibilities for oversight.

NFTs will mature

Non-fungible tokens (NFTs) made their collective presence felt in the general crypto asset market, bursting into the mainstream conversation after the March 2021 Beeple auction, for a tantalizing sum of $ 69 million (61, 25 million euros).

Over the year, countless athletes, artists and organizations have entered this space.

Even the concept of the metaverse, an idea that surfaced in Q4 2021, depends on NFTs and the tokenization of ownership that can connect the physical and digital worlds.

Stablecoins will go mainstream

Cryptocurrencies may have been discussed and discussed – at this point – for more than a decade, but that doesn’t mean it’s okay to generalize the industry.

Specifically, stablecoins have quickly emerged as a tool to enable the widespread use of crypto payments, have been adopted by payment processors and financial institutions around the world, and even play an essential function in the trading space. decentralized finance (DeFi).

Featured in the recent President’s Task Force report highlighting the 500% increase in usage from October 2020 to October 2021, stablecoins will undoubtedly continue to gain in importance and adoption in 2022.

Bitcoin will hit $ 100,000 in 2022

Price predictions, especially when connecting to Bitcoin and other crypto assets, are notoriously difficult to come by, but it’s still worth a try.

Goals over $ 100,000 (€ 88,760) are relatively common in today’s conversation, but should normally be at least several years away.

Especially given recent price volatility, such a target might seem a bit of an exaggeration, but the trend towards wider adoption and integration reinforces this prediction.

The past year has been dynamic and rapid for the blockchain and crypto asset industry, but that doesn’t mean the future will be less creative and innovative.

Even if a lot of ambiguities and uncertainties remain about the modalities of individual and institutional adoption, the underlying trend is clear.

Blockchain and crypto assets – of all kinds and iterations – will continue to proliferate, integrate into business operations, and mature as the timeline switches to 2022.

Whatever trend or specific application emerges, the future of space does look bright.

_Dr Sean Smith is Strategic Advisor in the Central Bank’s Digital Currency Think Tank and a regular contributor to Euronews Next. _

[ad_2]