Current Market Condition on December 21
The worldwide economy has been severely affected by the COVID-19 outbreak. The virus spread to 188 countries, resulting in the shutdown of businesses and the loss of jobs for many people. However, large corporations were also impacted by the virus, which primarily targeted small enterprises. Against the backdrop of COVID-19’s uncertainty, Bitcoin, Ethereum, and other digital currencies have received a lot of attention. For the first time, even large financial institutions are investing in cryptocurrency. Cryptocurrency has had a tremendous year in 2021.
Coins to Focus
As we enter 2022, all eyes are watching to see what’s next in crypto. By now, blue-chip tokens like Bitcoin and Ether are familiar to everyone who’s had even a passing interest in “holding.” And with Bitcoin usually trading above $60,000 and Ether selling at $4,000, some investors may be on the lookout for lesser-known cryptocurrencies that may provide bigger profits. Fortunately for them, there are many other altcoins—cryptocurrencies other than Bitcoin—that have the potential to explode in popularity and become the next big brand.
Last week, Ethereum, the second-largest cryptocurrency, reached record highs, spurring a rise in bitcoin’s price. In the last month, Ethereum’s price has increased by 35%, whereas bitcoin’s has only increased by 25%.
Ethereum may overtake Bitcoin in value by 2022, according to a hedge fund manager, as the combined crypto market approaches $3 trillion for the first time in history.
Market Trends and Projections
Cryptocurrency has grown in popularity, nearly approaching the mainstream investment class. New cryptocurrencies have emerged since Bitcoin’s introduction, providing investors with a wide range of choices. This asset class has received a great deal of attention as a result of the remarkable returns experienced by some investors. Between March 2011 and March 2021, Bitcoin was the best-performing asset, returning 230 percent annually. The Nasdaq-100 ETF (QQQ) had the second-best performance during that time span, with an annualized return of “only” 20%. The short-term outlook for the rapidly increasing Bitcoin market is unknown. Some of the most common bitcoin estimates for 2022, according to the Bitcoin community.
- Ethereum May Defeat BTC
Although Ethereum is not as well-known as Bitcoin, it more than deserves to be. Ethereum is the second-largest cryptocurrency by market capitalization, and its growth has overtaken that of Bitcoin. Ethereum may very possibly overtake Bitcoin as the most valuable cryptocurrency in 2022 if present trends continue. This may make Ethereum an attractive option for investors seeking to diversify their crypto holdings beyond Bitcoin alone.
- Payments Made Using Cryptocurrencies Will Be More Common
One of the primary criticisms leveled towards cryptocurrencies is that they are not recognized as viable monetary substitutes. If this happens, several cryptocurrencies may lose value. In 2021, the tendency has been the reverse, and it appears to be continuing into 2022. Cryptocurrencies’ viability and value will undoubtedly improve as more businesses adopt them as legal tender.
- More Countries Will Accept Cryptocurrency
In September 2021, El Salvador will become the first country in the world to accept Bitcoin as legal currency. Five or more nations could accept crypto as a legal currency by 2022, according to BitMEX CEO Alexander Höptner. As a result of these adoptions, it’s possible that additional countries will follow suit.
- A New Digital Currencies Will Be Issued by Central Banks
Since China’s central bank has produced its own digital currency, the rest of the world has followed suit. Many governments are considering adopting their own digital currencies in order to protect themselves from the threat posed by existing cryptocurrencies. In order to circumvent the unregulated, decentralized structure of current cryptocurrencies, countries can manage and control their own digital currency.
- Cryptocurrency allocations may be increased by both investors and corporations alike.
Increasingly, both individual investors and businesses are incorporating bitcoin into their investment portfolios as the technology becomes more widely accepted. According to some financial advisors, a modest portion of one’s assets should be invested in cryptocurrency, and more businesses are doing the same. By the year 2022, as a result of these reallocation adjustments, more and more money will be moving into cryptocurrencies.
- Some Cryptos May Lose Value
With thousands of cryptos competing for a space in the business, it’s likely that some, if not many, will lose all value. Bitcoin, the market leader, still has many significant investors opposing it, predicting its value will be zero. If the most popular and well-known cryptocurrency collapses, thousands of other less useful and acceptable cryptos may lose support.
While cryptocurrencies have gained in popularity and value over the last few years, they are still far away from broad acceptance of them as a legitimate form of cash or payment in the mainstream economy. Even if digital currencies ultimately replace or coexist alongside paper currencies, investors have no way of knowing which cryptocurrencies will survive, much alone which will emerge as the field’s dominant long-term player. 2022 may be a milestone year in terms of cryptocurrency adoption, visibility, and possibly market value. At the very least, a lot of the predictions made on this list are likely to come true in the near future.
