Robert Steinadler, a year ago

2021 is almost over – What to expect for the crypto market in 2022?

The year 2021 is almost over and many magazines and blogs are looking back on what has happened during this eventful year. But this is not the most important thing to look at. The year 2022 lies ahead and many investors ask themselves what to expect from the market and which investments might be promising after all.

Let’s take a break from 2021 and take a look at what the future might hold for the market and possibly for your portfolio.

Bitcoin becomes independent

Throughout the last two years, many analysts have pointed out that the market is going through cycles. This theory and all other models of the market that are related to this interpretation have been very attractive since they provided a seemingly reasonable explanation for what was happening with Bitcoin in terms of price.

This has changed since we haven’t seen a tremendous rally at the end of the year and we haven’t witnessed a sharp decline either. It seems that Bitcoin is becoming independent from a cycle that has been repeated over the last 8 years.

This is neither a good nor a bad sign. The market might decline further in 2022 or it might go bullish. According to several analysts, the bull case is that we will see a rally that could possibly peak in March. The bearish scenario for Bitcoin is a continuous decline throughout the year possibly fading into a bear market or setting up the stage for the next bull run. While the outcome remains speculative it becomes clear that the market structure has changed. The times of a tremendous pump followed by years of depression seem to be a thing of the past.

Gaming and the metaverse is the future

The pandemic has tightened its grip. With the Omicron variant, several nations have become very cautious recently. There is a good chance that at least some of the industrial countries will resort to lockdowns again. And even if the situation is easing, it becomes clear that travel won’t be so easy like in the times before the pandemic. Corona is going to last and will change our everyday lives.

What does this mean for the crypto market? Consumers are most likely going to stay at home, making home entertainment even more important. With Ethereum and Solana, two layer-1-blockchains have entered the race to become the top platforms for blockchain gaming. These games will allow players to own and trade content making it even feasible to make a living as a gamer.

If you like to take a glimpse of what developers are trying to achieve just take a look at Star Atlas pre alpha material.

CBDC is coming

Many countries have started pilots throughout the last two years in order to explore the possibilities of central bank digital currencies (CBDC). It is to be expected that at the end of the year 2022 more nations will conclude their first experiments.

It still remains open if they are looking to compete with stablecoin solutions or if they are going to shut down the private sector completely. It seems that most western countries are not going to force out stablecoins but rather regulate them more thoroughly.

The effect of digital cash could become a challenge for cryptocurrencies since it offers the same speed combined with high security but without the volatility offering a stable value. Depending on the adoption of CBDC, the role of Bitcoin could be indeed defined as some sort of the digital equivalent of gold rather than a medium of exchange.

Of course, we have to take these statements with a grain of salt. Since Bitcoin aims to be the only monetary network that is not controlled by a single entity. CBDCs on the other hand are the complete opposite.

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We wrote about it earlier: Jason Lowery believes Bitcoin could become the world's reserve currency and that countries should engage in a peaceful "arms race" to mine Bitcoin. He believes Bitcoin is a form of digital property that will be defended similar to how navies secure maritime thoroughfare. Not everyone is sold on this concept. Let's discuss a contrarian view.

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