What does cryptocurrency mean in 2022?

New payment apps for using cryptocurrencies, more regulatory oversight, and more NFTs. All this awaits us in 2022, but for sure there will be something else that cannot be expected at the moment.

The year 2021 marked several important turning points in the field of cryptocurrency. First, new applications of cryptocurrencies such as NFTs have emerged, as sales of these digital assets at major auction houses have broken new records. Second, Bitcoin has moved towards general use. Large websites such as Expedia and Microsoft have adopted this currency as a medium of exchange. Third, in September, El Salvador became the first country in the world to accept Bitcoin as legal tender.

In the past year, the cryptocurrency market has expanded with many other examples. So what awaits cryptocurrencies in 2022, given the significant development that we are monitoring practically on a daily basis?

According to The Next Web, cryptocurrencies are expected to gain momentum next year in three main areas: increased acceptance of Bitcoin as a payment method, increased regulatory oversight and increased NFT activity.

accept bitcoin

Understanding what motivates individuals to adopt Bitcoin is a challenge for researchers. A recent study showed that the likelihood of someone using Bitcoin is affected by five main factors:

  • Trust the system
  • word of mouth spread
  • Quality of online platforms for transactions
  • Perceived investment risk
  • Bitcoin success predictions

Other studies have extended this claim by considering gender, age, and education level as equally important factors.

Given the situation in the cryptocurrency market, it is increasingly likely that Bitcoin will become “mainstream” in the near future.

First, there has been increased activity in online communities such as Twitter and Reddit, where even newcomers to cryptocurrency can share information with experienced investors and get word-of-mouth advice on price predictions and trading strategies.

Secondly, there has been an explosion of new cryptocurrency exchanges – trading platforms where classic currency can be exchanged for cryptocurrency – and significant investments in the technological infrastructure of existing exchanges. These infrastructure investments have expanded access to the cryptocurrency markets and aroused the interest of institutional investors.

Institutional Participation and Regulatory Oversight

In the past year, institutional players such as the European Investment Bank (EIB) – the lending unit of the European Union – have taken a stand on cryptocurrencies.

In April, the European Investment Bank issued a 100 million euro digital bond on the Ethereum blockchain. Goldman Sachs, Banco Santander and Societe Generale also participated in this release. Research has shown that institutional adoption is a turning point in the widespread adoption of cryptocurrencies, and it appears that we are rapidly approaching that goal.

With the availability of outlets that accept Bitcoin as a medium of exchange and institutional investment in this space, it is likely that Bitcoin will be more accepted as a method of payment in 2022.

With cryptocurrencies, decentralized finance (DeFi) is the next big guru in the “fintech” space. DeFi offers the opportunity to create decentralized systems, create new securities such as “stablecoins,” or even new corporate governance models.

The researchers highlighted the lack of regulations as a major obstacle to cryptocurrency adoption. Due to increased government oversight and a move by many countries to consider digital versions of their national currencies, there will likely be many regulatory activities in 2022.

circulating NFTs

2021 brought a new wave of NFT sales. An NFT can provide proof of ownership of digital art, for example, in the same way that a physical painting can provide proof of ownership of a Vincent Van Gogh painting.

Although NFT began as a way to formalize ownership of digital art, it later expanded to include other types of digital ownership, including digital real estate.

NFT sales have broken records – most recently at Sotheby’s bringing in $17.1 million. This is why the auction house has opened a Metaverse marketplace that is only for NFTs and allows the sale of digital works.

With the emergence of new NFT applications, this area is likely to continue to grow in 2022.

Customers, be careful

Despite these investment opportunities, cryptocurrency investors should be skeptical about the information they receive in the online communities. Cryptocurrency enthusiasts should undergo at least a thorough review before investing.

In 2022, new scams are sure to appear. For example, the cryptocurrency SquidGame, which took advantage of the popular Netflix series, but it was a hoax. Or a fake Banksy NFT painting that sold for £244,000.

Research on the behavior of small investors has shown that some are highly susceptible to “afraid of delay”.

Therefore, it can be difficult to turn down the advice of a hairdresser or your best friend’s cousin about the next cryptocurrency opportunity. However, cryptocurrency investors need to familiarize themselves with the technology and the fundamentals of the financial markets if they are to be careful.

One of the options we trust in the editorial office is Avatrade. You can also find more in the article How to Buy Bitcoin Easily?

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