5 crypto predictions for 2022

[ad_1]

Pundits are divided over where the crypto market will go in 2022, with fans claiming the digital asset is the future of finance, and skeptics insisting it’s a ready bubble to burst.

But there’s one thing they can all agree on: we’ll still be talking about crypto next year.

2021 has been a busy year for the market, with the global crypto value reaching $ 3 trillion. Popular cryptos like Bitcoin and Ethereum continued to hit record highs. Coins like Dogecoin and Shiba Inu have gained the attention of the internet – Dogecoin even saw a 400% increase in one week thanks to the hype online. Meanwhile, the CoinBase crypto exchange became the first major cryptocurrency company to list its shares on the U.S. stock market, and financial regulators have started to take a closer look at digital currency.

The crypto boom does not appear to be abating in 2022. Here are five expert predictions.

More financial advisors will embrace crypto

Financial advisers have been in a tough spot when it comes to cryptocurrency. Due to the lack of regulation regarding digital currencies from the Securities and Exchange Commission and the Financial Industry Regulatory Authority, advisers don’t get the advice they typically want before making recommendations to clients. But that doesn’t mean their clients don’t ask: A Financial Planning Association (FPA) survey released in June found that nearly half of advisers said clients asked about the asset during over the past six months, up from 17% in 2020.

Three years ago, financial advisers were very hesitant about crypto and discouraged their clients from buying the risky asset, says Ben Cruikshank, director of Flourish, a fintech platform designed for investment advisers that has recently launched a cryptocurrency offering.

The times have changed. Six months ago, the overwhelming interest of advisers was in Bitcoin only. Now virtually all of the companies Flourish speaks to are interested in Bitcoin and Ethereum, Cruikshank says.

“The advisers are finally giving this space the attention it deserves,” he adds. “They really can’t afford to wait any longer.”

Ads by money. We may be compensated if you click on this ad.

Get the financial advice you need, without leaving your home.

An online financial advisor can help you craft a solid and effective business plan that’s right for you. Click below to find out more.

Start We will see a new regulation

Of course, something that would make it easier for financial advisers to approach cryptocurrency is more regulation – and experts expect us to see that, too.

Financial regulators will issue a slew of new regulations and enforcement measures, which will cause frustration, but should eventually lead crypto further into the mainstream, said Patrick Haggerty, director of Klaros Group, a consultancy and consulting firm. investment in financial services.

Securities regulation has always been a huge question mark in the crypto space, as it’s not even clear whether crypto should be treated as a commodity, a security, or something entirely different. Whether or not we get clarity there is an open question, but the SEC has an aggressive stance and will likely develop clarity through app rather than releasing a clear roadmap for people, Haggerty says.

DeFi – or decentralized finance, which refers to a variety of financial products that can be accessed directly through a blockchain network compared to traditional intermediaries like banks – is a whole different ball game. In many ways, DeFi mirrors traditional financial systems, but does so without the regulation that traditional financial systems face.

One aspect of regulation here could be stablecoins, coins whose value is tied to an outside asset like gold, on which many DeFi applications are based. Regulators can determine what a stablecoin issuer must do to call itself a stablecoin, Haggerty says.

More women will become crypto investors

The profile of the typical crypto investor will change significantly in 2022, Franck Kengne, senior product manager at the Gemini cryptocurrency exchange, told Money by email.

The average owner of a cryptocurrency is a 38-year-old man who earns around $ 111,000 per year, but that is expected to change, according to the Gemini 2021 State of Crypto in the United States report. Almost two-thirds of American adults are curious about crypto because they don’t own crypto but want to learn more or own digital assets soon, and 53% of those people are women. Currently, only 26% of current crypto holders are women, according to the study.

If investors interested in crypto actually take action, the demographics of crypto investors could change dramatically.

This broadening of the mainstream investor base is reflected in established companies like Paypal, Expedia and Microsoft allowing bitcoin transactions, Kengne adds.

Ads by money. We may be compensated if you click on this ad.

Join Coinbase and gain the tools and confidence to start trading cryptocurrencies, stocks, and other top markets.

Coinbase helps you manage your cryptos with confidence 24/7. Buy and sell your assets commission-free today!

Start investing in crypto More and more large retailers will start to accept crypto

This year we have seen more and more companies join the growing list of companies that have started accepting crypto as a form of payment. The chain of cinemas AMC, for example, announced that it would start accepting ether, bitcoin cash and litecoin in addition to bitcoin for the purchase of tickets.

Meanwhile, retailers like Amazon and Walmart are hiring blockchain and crypto experts to develop their digital currency strategies.

2022 could be the year when paying with crypto becomes real, said Sung Choi, vice president of business development at Coinme, the digital currency exchange that partners with Coinstar to bring ATM-style Bitcoin kiosks to retailers. retailers like Walmart. This is in part because consumers, especially Millennials and Gen Z, lead more digital lives and can have crypto that they would be happy to spend, he adds.

Eliminating credit card and debit card fees can really make a difference for a retailer, so more people may be tempted to accept crypto, Sung says.

But of course there are risks. As Deloitte points out, companies may need to hire a third-party vendor to help them with transactions, and these will charge their own fees. Businesses should also monitor a crypto’s value very carefully when trading for tax purposes – a potentially difficult task because cryptocurrency is so volatile.

The crypto bubble will start to deflate

Not everyone is convinced that crypto is the future of finance.

“This is modern day tulip madness,” says Robert Johnson, professor of finance at Creighton University’s Heider College of Business.

Tulip Mania refers to the time when a Dutch company got into a frenzy about exotic tulip bulbs and spent tons of money buying them in the hope that they could then sell them, and is often used to describe speculative assets. David Booth, founder of Dimensional Fund Advisors, also compared Bitcoin to tulip bulbs when Money interviewed him earlier this year.

2022 will be the year the crypto bubble begins to deflate, according to Johnson. The Federal Reserve has indicated that it will begin to tighten federal policy, and the tightening tends to hit the more speculative markets first. Crypto is most definitely a speculative asset, he adds.

And cryptocurrency doesn’t have intrinsic value like a stock, Johnson says.

“People tend to fall in love with the shiny, shiny new object and kind of forget that what makes something an investment is the intrinsic value of an asset,” says Johnson.

Newsletter

Every day, we publish the latest news, stories and content on the financial topics that matter. This is your daily guide to all things personal finance.

Newsletter

Subscribe successful!

You will now receive the Money’s Daily Money newsletter at

Reply anytime to let us know how we can improve. Enjoy!

Make sure we’re landing in your inbox, not your spam folder. We just sent you a welcome email. Sometimes email clients send our first email to a spam or promotions folder. If you don’t see us in your inbox, check these folders, then drag and drop the welcome email to your inbox.

More money :

Crypto crooks used Google to steal over $ 500,000 last month

5 crypto investments that could steal the show from Shiba Inu, experts say

To have and to HODL: Welcome to love in the age of cryptocurrency

[ad_2]