Cryptocurrency has emerged as one of the most profitable investment opportunities in the past few years, overtaking stocks, commodities, oil, and even gold. And it’s clear that the buzz has yet to die down. The global cryptocurrency economy — particularly in the Central, North, and Western regions of Europe (CNWE) — remains strong. Countries in CNWE sent at least 25% of all value received by other regions, and a whopping 34% for North America.
Analysts note that the influx of institutional investments drove the most growth with large transactions, while retail activity also increased. For 2022, cryptocurrency displays a promising potential for further growth; it looks to stay profitable, especially as it has remained unaffected by the COVID-19 pandemic. Here are some crypto trends we can expect to see in the next year.
Crypto Trends to Watch Out for in 2022
1. Additional regulation worldwide
Cryptocurrency is often condemned for its decentralized nature, which is why regulative measures are being proposed to prevent the misuse of digital tokens for unlawful purposes like money laundering. Therefore, one of the top crypto trends we can expect to see are advanced crypto exchange monitoring methods, required identity verification through know-your-customer (KYC) processes, and possible taxation on digital assets. While there will be many trade-offs with regulation, these processes are essential to encourage adoption and drive demand.
2. ”Gold standards” in investment criteria
Initially, crypto investors embraced the flaws and risks inherent to an immature market. Within three years, they overcame hurdles and fixed custody issues, built proper corporate structures, and worked out how to execute trades at a large scale. However, the next generation of investors won’t be as lenient; they expect crypto to live up to gold-standard criteria akin to traditional investments. Aside from fixing issues, growth must reflect maturing standards. The period of rapid, chaotic growth will no longer work in crypto’s favor, and industry experts must be able to answer to institutional investors during periods of rapid growth.
3. A surge in commercial cryptocurrency adoption
With more cryptocurrency investors buying and selling coins at shorter intervals, crypto’s liquidity will likely rise in the coming years. In fact, more commercial companies will accept cryptocurrency payments for transactions and purchases; even international schools and universities have begun looking at crypto to ease the burden for international students struggling to exchange fiat currency. Therefore, one of the crypto trends we are bound to witness is commercial cryptocurrency adoption in various sectors.
4. Rise in altcoin popularity
This crypto trend is surely going to excite many traders. While Stablecoins will remain strong throughout 2022, altcoins are also predicted to see a rise, as many trends are skewing away from Stablecoins maximalist patterns. It’s highly likely that if Bitcoin ever depreciates, the value of altcoins will rise in its place.
5. Resolution to the sustainability problem
The cryptocurrency market as a whole will work to address the environmental impact of crypto mining. Investors have a hard time accepting the high energy consumption of cryptocurrency, so many will try to find renewable alternatives and reduce the carbon emissions associated with mining coins and tokens.
Preparing Your Crypto Portfolio For 2022
Compared to other investment types, the cryptocurrency market is relatively new — which makes it volatile. In early September, the total value of the world’s cryptocurrencies fell to about $1.9 trillion, marking a loss of $410 billion over 24 hours. Leading cryptocurrencies like Bitcoin and Ethereum, along with popular alternative coins Binance Coin and Dogecoin, saw a decline of more than 10% that week.
Based on how the market moves, one of the best ways to prepare your portfolio is to run your decisions by someone with expertise in investments. A reputable finance professional can screen any market noise for you and protect you from potential scams.
Finally, it’s best to review your existing strategies to manage risk. Come 2022, you may need to perform position sizing, profit booking, or analyzing the risk-reward ratio as the cryptocurrency economy changes. Studying cryptocurrencies and trading platforms lets you reduce investment risks and keep your wealth secure.
This piece is specially written for Mudrex by Reese Jones.