Did you know that since March 2020, the global cryptocurrency market has ballooned to 900%, and the Bitcoin price went from $6,000 to $60,000 in 12 months? As of December 2021, the global crypto market capitalization was valued at $2.21 trillion after touching the record high of $3.3 trillion a month ago in 2021. Quite clearly, the year 2021 was one of the most impactful years when it comes to crypto trading.
Today, a hundred and four countries have made cryptocurrencies completely legal, which means it is safe to purchase and trade them in these countries. This rapid acceleration of the adoption of cryptocurrencies and the fast-paced development of blockchain technology is one of the most exciting trends of our lifetime.
We already know that 2022 was the most eventful and instrumental year for the cryptocurrency and blockchain industry. The potential of cryptocurrency and blockchain is wider than one can anticipate. It has the potential to transform the financial, insurance, supply chain, and logistics industry, among others.
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The trends we see in 2021 are only a preview of what’s yet to come in 2022 and beyond. This year’s groundwork will lead to more exciting trends to play out this year and further. These trends will further accelerate the adoption rate of cryptocurrencies.
More Countries to Legalise Crypto
It was a landmark for the crypto industry when in September 2021, El Salvador became the first country to make Bitcoin a legal tender. More and more countries are likely to regulate and incorporate cryptocurrency into their financial system in years to come. It will make the whole process to convert cryptocurrency (fiat) and buy crypto with a credit card as well as other conventional payment options quite seamless.
It’s expected that the Eurozone will roll out its set of cryptocurrency regulations called the Markets in Crypto-Assets (MiCA) framework in 2022. Other countries and jurisdictions are likely to regulate cryptocurrency similarly. It is likely to turn into a domino effect that will compel governments to explore the prospect of integrating cryptocurrency into their economy and financial system.
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Conventional Finance Will Step In
The talks about the moment when bitcoin replaces fiat currency and overtakes global finance gained momentum lately and is expected to happen by 2050. It has led to a number of traditional financial institutions stepping into the crypto industry. No wonder it’s extremely convenient to buy cryptocurrency today.
Some examples include Morgan Stanley becoming the first US bank to offer Bitcoin funds to wealth management clients and BlackRock (the world’s largest asset manager) introducing crypto in two funds in early 2022. This year, more financial institutions are expected to follow in their footsteps and launch more crypto offerings.
More Use Cases of Blockchain Technology
If you were not living under a rock last year, you would know that 2021 was the year of NFT or non-fungible tokens. Towards the end of 2021, the NFT aggregate sales value in the ark market stood at a whopping $774 million. For those unaware, NFTs are arts that are protected by blockchain technology.
Now that we have digital art protected by blockchain technology against forgery as its ledger is maintained by thousands of computers globally, it’s entirely possible to find other use cases. Blockchain can be used to keep the digital identity of the users safe and secure. It can also be used to secure and improve various processes across industries like healthcare, finance, and public policy.
Crypto Saving Accounts
Another trend that might catch momentum in 2022 and beyond is dedicated saving accounts for cryptocurrencies. With Bitcoin and Ethereum, investors can deposit (staking) them in crypto savings accounts to yield a high-gain passive income. Experts have predicted that staking will soon become a legitimate source of revenue for investors, institutional and retail alike.
If numbers are to be believed, staking is currently generating around $9 billion of revenue every year. Once Ethereum 2.0 rolls out, it is likely to boost the adoption of staking in the DeFi industry, leading to sharp growth in the staking pay-outs. This way, investors will be able to use their idle digital assets to generate a secondary income. This trend is expected to gain momentum in 2022 and beyond.
These are the top cryptocurrency market trends expected to play out this year. If you have been on the fence to add crypto to your portfolio, now is the right time. That primarily is because the regulators continue to work on making cryptocurrency as safe and secure in their jurisdiction as possible.