What is the future of Bitcoin and cryptocurrency in 2022 and beyond?
That’s a sensible question, especially given the excitement bitcoins and various other cryptocurrencies have created worldwide. Here’s a word on it.
Bitcoin has been around for quite a while, precisely, more than a decade. Its creation stemmed from the worldwide financial turmoil in 2008. Almost 14 years since its creation, Bitcoin has significantly evolved. It is one of the largest and most popular cryptocurrencies in the world. Per reports, over 40 million Americans own a share of Bitcoin, and the users continue to proliferate. Read more multibank.io.
People are always prepared to take risks and make courageous investments when it comes to earning money. As a cryptocurrency, Bitcoin is yet unregulated in many countries. But that doesn’t matter to the enormous number of users Bitcoin has. The influx of investments is as significant as it has always been. As a result, Bitcoin has grown substantially and might continue to grow in future.
Now, it is precisely the latter part that concerns us. Why? Cryptocurrency investments are exciting. So, one may say they’ve got a bright future. But on the other hand, they are volatile. That’s where the catch is!
Accordingly, amidst digitization and evolving terms like digital currencies, digital assets, etc., what does the future have in stock for Bitcoin and cryptocurrency in its entirety? How will cryptocurrency fare in the market? Let’s attempt to explore.
How did Bitcoin Perform in 2021?
Let’s start with Bitcoin. Bitcoin had a ball of a time in 2021, as it soared to new heights. In November 2021, one bitcoin had a whopping value of approximately $49,000, which was way higher than $26,000 in July 2021. No wonder people are so enthusiastic about Bitcoin! However, Bitcoin’s valuation has always been highly dynamic, making price volatility a prevalent feature of the crypto.
But another reason that makes Bitcoin an enthralling investment proposition is its acceptance by banks. Many prominent banking institutions and countries have adopted bitcoin as a legal tender. Exciting and promising, isn’t it? Nevertheless, you must always consult a financial expert while investing in Bitcoins.
Bitcoin’s Future in 2022
Bitcoin is currently at a record high. But remember, cryptocurrencies are an uncertain asset class. No one can project the highs and lows that the value of a cryptocurrency can hit. However, with the current value as high, governments are looking to regulate the currency. Hence, you would always have a particular risk while investing in bitcoin!
Although one cannot predict the future accurately, the future of bitcoin can feature the following.
- The currency will continue to remain volatile. So, users will always be seated on a roller coaster regarding bitcoin’s value.
- Changes to cryptocurrency regulations are likely to happen.
- People’s interest in bitcoin will continue to rise. Many companies are increasingly adopting bitcoins and accepting payments in them.
- Many banks will continue to join the crypto revolution.
Future of Cryptocurrency
The future of cryptocurrency also can be looked at across various categories. The first one could be regulations surrounding cryptocurrency, crypto ETF acceptance, and institutional adoption. Let’s look briefly at each.
- Cryptocurrency Regulations
One concern a crypto user has with cryptocurrency is the delays in setting up regulations. The more cryptos will be delayed, the riskier they turn for users.
Users would be happy when they don’t have stricter regulations on crypto, as they’d be more assured about their crypto investments.
But it could be pretty ambiguous for someone to predict the future of cryptocurrency regulations. It is because cryptocurrency perceptions across various countries and jurisdictions vary significantly.
For instance, although the cryptocurrency is unregulated in India, the government has imposed a tax of 30 percent on profits stemming from the sale of cryptocurrencies. However, on the other hand, some countries have completely banned the use of cryptocurrency.
Regulations can help streamline and uniformize the situation. They can impact the cryptocurrency’s future scope through an effect on cryptocurrency prices in relatively volatile marketplaces. Regulatory changes can drive market volatility trends. Nevertheless, crypto regulations would only enhance people’s trust and confidence in crypto in the long run.
- Crypto Exchange-Traded Funds (ETFs)
Crypto ETF is another essential aspect of cryptocurrency future predictions for 2022 and beyond. The first-ever and the most significant development in this regard is Bitcoin ETF, introduced on NYSE in October last year. It refers to the emergence of a new and broader approach toward cryptocurrencies and paves the way to making cryptocurrency part of the mainstream economy.
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Crypto ETFs can prove healthy for crypto adoption. However, they pose some investment risks similar to cryptocurrencies, as they are derivatives of the latter. Nevertheless, crypto ETFs will form a significant highlight of cryptocurrencies in the future. If cryptocurrencies become part of the mainstream economy of a particular country, crypto ETFs can prove to be game-changers!
- Institutional Acceptance and Adoption
As said earlier, many companies are increasingly accepting and adopting cryptocurrencies. They are developing exclusive platforms to facilitate cryptocurrency transactions within their ecosystem. It includes companies from various businesses worldwide. But there’s a lot of action yet to happen.
Many companies are still reluctant or haven’t even thought of adopting cryptocurrencies. One of the reasons cryptocurrencies aren’t reaching the mainstream economy is that they lack visibility. Buyers do not know where they can use cryptocurrencies to buy routine commodities and essentials.
Nonetheless, crypto, which is yet an unstable form of currency, can turn stable with large-scale adoption at both the individual and the institutional level.
So, is the future of Bitcoin and cryptocurrencies in 2022 and beyond bright or uncertain? Well, unfortunately, at least as of now, it is the latter.
It is because, on the one hand, people are widely accepting and buying it; on the other, governments haven’t set regulations to control them. Institutions are adopting them, but many fear their lack of visibility.
While there’s no doubt that cryptos are a revolutionary and disruptive innovation, the future remains uncertain, if not stark.