Cryptocurrencies are becoming more popular in the last few years and are at a point where
they are on the verge of becoming mainstream currency shortly in some countries. Bitcoin is the best-known and high-value cryptocurrency in the current market, but many other digital currencies have entered the market. Many people are investing in these currencies with the expectation of huge returns because many investors have earned tremendous returns. If we look at the example, Bitcoin is the best-performing currency asset in the last ten years from Mar 2011 to Mar 2021, with a striking annual return of 230%. There can be many uncertainties in the market and a possibility of different trends in 2022.
Let us see some of the possibilities that may happen in 2022.
Ethereum May Cross Bitcoin: Ethereum cryptocurrency is the second currency after bitcoin in more demand. Since the last few days, its gaining is more than bitcoin. Therefore, this currency may overtake bitcoin in 2022 if the trend continues in the market. If this happens, Ethereum will become the most obvious choice of investors. Since many investors are keener on availing multiple currencies, there is a possibility that Ethereum will become the choice of investors in 2022.
Cryptocurrencies May Become Acceptable as a Payment Source: Digital currencies can become an authentic replacement for traditional currencies in 2022. Currently, more and more businesses have started accepting bitcoin as a legal tender, there is an increasing possibility that the value of cryptocurrencies will increase. El Salvador this year became the first nation to accept bitcoin as a legal tender. If many countries choose to do the same in 2022, then bitcoin and other cryptocurrencies can become acceptable sources of payments in many places in the world.
Central Banks May Issue their Own New Digital Currencies: China is pushing for adopting its digital currency issued by its central bank. Countries can avoid the unregulated adoption of cryptocurrencies by their citizens by having authentic digital currencies.
Companies and Investors Will Increase their Cryptocurrency Allocations: Many investors and companies will increase their allocations of cryptocurrency and digital assets. These allocations will take momentum in 2022. Therefore, there will be a flow of more money into cryptocurrencies in the year 2022.
More Countries Will Adopt Cryptocurrency as Legal Currency: There is a huge possibility that many countries will adopt bitcoin as a legal tender in 2022. At least five or more nations may follow the trend started by El Salvador in 2022 and will adopt cryptocurrency as legal currency. If adoptions by these countries prove to be a successful decision, then other major countries will also look for adopting cryptocurrency as legal tender.
Cryptocurrencies May Become Valueless: While the usual trend for accepting cryptocurrency is increasing, thousands of cryptocurrencies out there will compete for dominance in the industry. With this, it will be a challenge for all to maintain their competency and some or many cryptocurrencies may lose their value. If the value of the topmost currency bitcoin topples, the other currencies may also become valueless.
Conclusion: Although cryptocurrencies have increased significantly in visibility and valuation, there is still a long way to go for these currencies to be accepted as mainstream currencies or as a source of payment.
