2021 was a big year for cryptocurrency, skyrocketing investors’ interests and discussions in popular culture. But what’s next?
The crypto industry is constantly evolving. While it’s impossible to predict precisely what will happen in the long term, we can follow current themes from regulation to the adoption of crypto payments to better understand the market. Here’s what to look out for in 2022:
- Bitcoin as a method of payment
In September 2021, El Salvador became the first country in the world to adopt Bitcoin as legal tender alongside the US dollar. The new law means that El Salvador citizens can use cryptocurrency to pay their taxes. What’s more, every business in El Salvador must accept Bitcoin as a form of payment unless it cannot provide the technology needed for the transition.
Alexander Hoptner, CEO of crypto exchange giant BitMex, has estimated five or more countries could follow suit in 2022 and accept Bitcoin as legal tender. If these adoptions prove to be successful, even more countries will likely adopt crypto as well.
- Ethereum may overtake Bitcoin
Ethereum, the second-biggest cryptocurrency, has been outpacing Bitcoin’s gains. If current trajectories continue, Ethereum may overtake Bitcoin as the most valuable cryptocurrency as soon as 2022. This makes Ethereum an interesting choice for investors wanting to diversify their crypto portfolios.
- Environmental emphasis
Crypto cannot escape the demand for greener alternatives. Bitcoin miners use high-powered computers that rely on fossil fuels and produce an enormous amount of energy.
So, is it possible to mitigate these harmful environmental effects? Hydropower could be the answer in 2022, as miners are predicted to find innovative ways to mine using greener technology – a win-win scenario for both the environment and the value of tokens.
- Clear-cut regulation
We expect to see more jurisdictions aligning on crypto regulation next year. This will enable crypto firms to safely innovate and create new products and services. At the same time, wary consumers can feel reassured about the legitimacy of their digital assets—the clearer the regulations, the better for the industry.
At Turner Little, we have decades of experience in wealth management. If you’d like to explore more about cryptocurrencies or other ways you can maximise your wealth, we’d be happy to help. Talk to a member of our trusted team today.