DeutschAs usual, around the turn of the year, many crypto insiders had their say with their forecasts for the global market and individual currencies. It was no surprise that Bitcoin, as always, was particularly often the focus of predictions. After a turbulent 2021 with some corrections as well as some new highs, the leading cryptocurrency could now take the next big step. This includes the development of the BTC price. Antoni Trenchev, one of the founders of the successful crypto credit platform Nexo, believes that Bitcoin has a good chance of breaking out into the $100,000 range by the middle of the year. Trenchev cites the positive development in terms of greater acceptance of the currency on the part of institutional investors in the USA as the reason. However, interest in digital currencies as a whole is also growing in other countries. Against this background, the question will be how the situation surrounding the regulation issue will develop.
Above all, measures in the USA could stand in the way of the expected breakout. For example, a faster adjustment of key interest rates by the US Federal Reserve (FED). A not insignificant proportion of crypto investors decided to invest in Bitcoin in the past two years because of the low investment interest rates – not only in the USA, by the way. Should US interest rates and key interest rates in other important economies be raised earlier than planned, this could at least have a dampening effect on the next Bitcoin breakout.
Outlook on NTFs – 2022 Will Take the Sector to the Next Level
According to many analysts, the non-fungible token (NFT) sector will take the next big step in the new year. The entry of renowned companies such as eBay into the trade in digital art is likely to take the already impressive trend to the next level. Global players such as VISA will also play a role in this area. Not to mention the influence of virtual worlds such as Metaverse and Decentraland, which will certainly become the linchpin for the NTF market in 2022 and will lead to the market continuing its rapid growth and probably expanding further. Interest in NFTs seems unbroken these days. Many institutions, but also museums, sports clubs and, last but not least, investment funds with strong capital resources are discovering the opportunities in the sector when it comes to the transfer of rights – both with regard to virtual and physical property.
DeFi Market is Facing a Good Year Thanks to New Approaches
There are also positive expectations for the decentralized finance sector (DeFi). Recently, numerous new exciting protocols such as OlympusPro or Tokemak have appeared on the market. More competition is always good news, especially for market participants. The liquidity of the sector has been constantly increasing for some time. A DeFi sub-sector with good prospects for 2022: crypto-based lending. So-called off-chain credit scoring systems provide more security for crypto lending and could lead to a noticeable increase in activities in this environment of the cryptoverse in the future.
A key growth factor for the market is likely to be cross-blockchain protocols. Keyword: Cross-Blockchain-Bridges. Protocols such as Ethereum Virtual Machine (EVM) or alternatives such as the Binance Smart Chain Bridge enable better interoperability. The Ethereum network could benefit from the positive trend in a special way, as usual. The result could be that Ethereum will gradually shorten the dominance gap to the Bitcoin blockchain again in 2022. In principle, bridge solutions will play an increasingly important role.
Outlook: State Regulation Remains a Controversial Topic
Many experts generally expect a further bull market for the new year. Despite declining dominance, Bitcoin will retain its top position for the time being – altcoins such as Ethereum, Polkadot and Solana will gradually gain in importance. The aforementioned aspect of regulation will continue to be a topic that accompanies the crypto world at every turn in the year that has just begun. Although state guidelines are a thorn in the side of many crypto users from the very beginning and, without question, also many service providers in the market. In fact, however, there are more and more exchange operators and other crypto companies that want clear regulatory conditions. Also and especially because this could additionally fuel the investments of institutional investors. States like the USA are gradually understanding that the crypto market is simply too big to continue to be ignored.
CBDCs and Blockchain Use outside the Crypto World
Last but not least, more countries will be looking at their own possibilities for digital central bank currencies (CBDCs). China will play an important leading role here. Such stablecoins can be of interest to investors looking for options with lower fluctuation risk. But, even if such developments should fail to materialize for the time being: The crypto market is becoming more important simply because more and more companies in a wide variety of industries are recognizing the benefits of blockchain technologies. The Corona crisis has led to a rethink. Disrupted supply chains could become much more efficient in the future through blockchains. Shorter transaction times, better traceability and approaches to identification make the blockchain an effective instrument that even more companies will take advantage of in 2022.
