Cryptocurrencies, the newest class of digital assets, is obviously one of the top technological disruptions in recent times. The domain of cryptocurrencies has been useful in driving plausible improvements, especially in 2021, with many notable improvements. Cryptocurrencies have been through three essential ingredients of adoption, innovation, and integration for achieving stupendous growth. However, it is also important to think of the future of cryptocurrency and what it holds for everyone. What are the top trends you can expect in the domain of cryptocurrencies next year?
Experts point out the possibility of 2022 being a slow year after the massive growth in 2021. The interest of people in crypto has doubled by huge margins in the last year. Interestingly, crypto is no longer a topic restricted to investors as it has also entered popular culture with many celebrities associating themselves with crypto assets. The following discussion helps you uncover an outline of the predictions for cryptocurrency future and their implications for investors. An understanding of the possible future for cryptocurrencies could help in preparing for changes in the crypto ecosystem over the next 5 or 10 years.
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Top Predictions for the Future of Cryptocurrency
The evolution of cryptocurrencies is obviously one of the most significant events in modern times. People have been wary of cryptocurrencies since the arrival of Bitcoin. However, the times have changed, and people are showcasing interest in crypto-based solutions. The existing state of cryptocurrencies definitely offers the right foundations for favorable cryptocurrency future predictions. On the other hand, the volatility of cryptocurrencies makes it difficult to draw clear insights into their future.
Some predictions regarding long-term events in the crypto space are farfetched and express a positive opinion on future of crypto. At the same time, it is also important to look for the critical aspects which might define the cryptocurrency future scope clearly. For example, how will the crypto regulations shape up in the future? Similarly, you can note a few other crucial trends for cryptocurrencies in 2022. Here is an outline of some of the top predictions for the future of cryptocurrencies in 2022 and beyond.
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Cryptocurrency Regulation
The questions about uncertainty in the crypto landscape often round-up on doubts regarding crypto regulations. It is impossible to deny the significance of regulations in the future of crypto in the next 5 years, even if lawmakers have not initiated any active measures for the same. As of now, all you can find is a lot of talk about cryptocurrency regulations. On the other hand, you cannot deny the gradual developments in crypto regulations. For example, US officials have been directing a share of their interest towards stablecoin regulations. Lawmakers worldwide are trying to figure out suitable precedents for crypto regulations to ensure safety for investors.
Regulations are the biggest drawbacks in the crypto industry, and the more they are delayed, the more crypto users are at risk. Without stricter regulations, investors are likely to have a better assurance of safety of their cryptocurrencies. On the other hand, long-term cryptocurrency predictions in terms of regulations can be quite ambiguous. How? The perceptions of cryptocurrencies in different jurisdictions create critical issues for establishing uniform crypto regulations worldwide. For example, some countries impose a tax on crypto transactions, while some have banned crypto transactions completely. Therefore, it is quite clear that crypto regulations would solve one of the prominent roadblocks to growth of cryptocurrencies.
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Implications of Crypto Regulations
The statements regarding cryptocurrency as next big thing in technology have a lot to do with their utility and how people perceive them. Crypto regulations would have a prominent impact on investors and the future of cryptocurrencies. Crypto tax reporting initiatives in the $1.2 trillion bipartisan infrastructure package by President Biden can improve tracing for crypto activity among citizens. New crypto tax rules in the US can enable crypto investors to report their crypto transactions. New initiatives such as introduction of 1099-B tax forms featuring cost basis information could help in reducing the problems of crypto tax filing.
Regulations can also influence the cryptocurrency future scope through an effect on cryptocurrency prices in comparatively volatile markets. Market volatility can witness any trend in event of regulatory changes. However, crypto regulations would only improve trust in crypto, thereby driving confidence in crypto assets.
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Acceptance of Crypto ETF
Crypto ETF has emerged as one of the solid highlights among cryptocurrency future predictions for 2022 and beyond. The major development in this trend points to the first-ever Bitcoin ETF, which was introduced on the New York Stock Exchange in October 2021. One of the significant highlights in the approval of crypto ETF refers to the availability of a new and conventional approach for crypto investments. Investors can use the BITO Bitcoin ETF to buy in on cryptocurrency directly from the traditional investment brokerages. In simple words, crypto ETF opens up a new road for integrating crypto into mainstream finance.
On the other hand, cryptocurrency future predictions regarding ETF also suggest that BITO ETF is not the only solution. Experts have pointed out that the ETF is only associated with Bitcoin and does not hold direct ownership of crypto. On the contrary, the ETF includes the Bitcoin futures contracts, which comply with general trends in actual cryptocurrencies. However, approval for crypto ETFs like BITO is a favorable improvement in the essential driving factors for future of cryptocurrencies.
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Implications of Crypto ETF
It is important to look for suitable solutions when new development comes with specific challenges. Therefore, the concerns regarding validity of crypto ETFs can have a crucial role in shaping them for better adoption. However, BITO showcased considerable trading volume in the first few weeks. At the same time, improving the accessibility of crypto assets in traditional investment products can help in empowering crypto adoption. The implications of crypto ETF for cryptocurrency future would also point to how users can add crypto to their portfolios directly from a brokerage. Remember that this brokerage would be the regular one you use for a traditional investment account or a retirement account.
While crypto ETFs can present positive implications for mainstream crypto adoption, it is also important to look for risks associated with them. After all, they are crypto derivatives and feature the same risks as every crypto investment. Crypto ETFs are obviously one of the prominent highlights for the future of crypto in the next 5 years, with a few challenges of their own. Investors can consider taking risks with investments in crypto ETFs, just like with any other crypto asset. If they are successful in powering the integration of cryptocurrencies in mainstream finance, then crypto ETFs will be a revolutionary force in crypto future.
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Institutional Adoption Rises
The most significant highlight among the long-term cryptocurrency predictions would often refer to institutional adoption. Mainstream companies across different industries have been investing their efforts and interest in crypto and blockchain. For example, AMC is one of the big names to have announced the adoption of crypto payments by the end of 2022. Many other notable examples include PayPal and Square.
The digital payment companies are setting the perfect precedent for proving that cryptocurrency is next big thing indeed. How? Both of them have enabled crypto payments on their platforms. At the same time, one should also notice how Tesla, a big name in innovation, took the initiative of accepting Bitcoin payments before turning away from its promise. Even if Tesla didn’t keep its promise, the company still has a billions worth of crypto assets.
The immense attention toward crypto is one of the foremost factors driving the institutional adoption of cryptocurrencies. As of now, the future of cryptocurrency depends on how bigger and global corporations will play out crypto adoption. Involvement of bigger institutions is a useful tool for improving trust and confidence.
For example, a big retailer like Amazon would lead to a chain reaction, ultimately adding up more credibility to cryptocurrencies. Interestingly, Amazon has recently stirred up some discussions with its job posting for a cryptocurrency product lead. Furthermore, Walmart is presently seeking crypto experts to guide its strategic approach to blockchain transformation. How will institutional adoption of cryptocurrencies affect investors?
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Implications of Institutional Crypto Adoption for Investors
The only thing stopping cryptocurrencies from reaching mainstream financial use cases such as everyday payments is the lack of visibility. Where do buyers use cryptocurrency regularly to purchase clothes? On the other hand, the cryptocurrency future scope might change with adoption of crypto payments by major retailers.
Although the dynamics of how volatile cryptocurrencies can serve institutional use cases are still under research, the everyday value benefits for crypto users can improve in future. You could also notice better stability in crypto prices with the massive scale of adoption. It is important to think of how the ‘real’ use cases of crypto in the actual world can increase its value and demand.
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Final Words
The future of cryptocurrencies in 2022 and beyond is considerably uncertain. Crypto adoption increased by unreal margins during the pandemic and the crypto market registered humongous levels of trading volume in 2021. The cryptocurrency future predictions for 2022 emphasize regulations and approval for crypto ETFs alongside institutional adoption.
All of these factors would affect not only the general crypto industry but also the experience of users and enterprises. In the long run, crypto has the potential to replace various conventional financial instruments. However, it can also work in tandem with existing financial services and products such as traditional brokerage accounts.
At the same time, the perception of real value with cryptocurrencies alongside the emerging utilities of crypto presents conclusive implications for larger crypto adoption rates. Learn more about cryptocurrencies and the crypto ecosystem to figure out more details about its future prospects.
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*Disclaimer: The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. 101 Blockchains shall not be responsible for any loss sustained by any person who relies on this article. Do your own research!
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