2021 proved to be a turning point for decentralized financing in the form of cryptocurrencies of various forms – NFTs and others. Consider these numbers – the January 2021 market cap was approximately $800 billion. By the end of 2021, the total locked-in value will be $100 billion (USD) for just one crypto. The company that has this award is Ethereum.
The rising popularity of NFTs was surprising, thanks to GameFi and Metaverse. Not many experts could have predicted these developments. Some experts expect to see interesting things happen in 2022.
2022 forecasts for the DeFi market
1. Bitcoin Prices to Break the $100,000 Price Market
With inflation rising worldwide, investors are looking for relatively safe places to put their money. Bitcoin is a popular cryptocurrency and not much in circulation. With only 21 mil. BTCs in circulation and wide adoption by many institutions, experts predict that the price will hit the $100,000 mark.
2. Ethereum platform to get an upgrade
Ethereum is still a dominant force in the market, but it has a few problems. An upgrade is in progress to complete the Proof of Stake. This will help the company to have a native staking infrastructure like Coinbase. Ethereum is a cryptocurrency with great potential thanks to its huge transaction volumes.
3. Sustainability of investments in crypto
Companies and financial institutions are increasingly interested in not only investing but also offering these services to their customers. This is an evolving issue and it looks like adoption will increase.
4. Introducing Web3 Infrastructure and Internet Decentralization
Web3 is a new concept that is expected to enable internet architecture to decentralize. It can be configured to be autonomous to use blockchain technology with ease. At its core, it is about reducing dependence on large networks and service providers so that data is handled in a transparent manner.
Web3 is expected to be easy to choose from different providers and have a good pricing structure.
5. NFT and Gaming Earnings
Metaverse, a virtual platform has become very popular among gamers. Here people work together and trade at affordable prices and it is made possible thanks to NFT and infrastructure based on blockchain technology. Axie Infinity was the main reason for this change in 2021. Well over a million people used this game method to make a lot of money. Expect more in this arena in 2022.
6. Emergence of the Multi-Chain World
Thanks to the smart contract-enabled blockchain world, we can expect more of the same. Multi-chain worlds will easily propel the transfer of value and information between people. Experts believe that the reliance on Ethereum and TVL will decrease with the availability of more blockchain solutions that are public.
7. More clarity with rules and prohibitions
Many countries will make their views known on how to handle crypto assets. This includes information about restrictions, prohibitions and how they intend to approach cryptocurrency adoption. Issues like AML, taxes and others will be addressed.
Officials in many countries are already talking about regulations and how to set up a legal framework to provide clarity about providers and how to issue crypto assets.
8. Digital Euro as a stablecoin
Many countries are testing and offering central bank digital currencies. The European Central Bank is not expected to offer a CBDC until 2026 or later. Small countries like the Bahamas have already adopted CBDCs and expect 70% of citizens to use this modality.
It is important for central banks to be involved, as digital currencies linked to specific currencies are not yet widely used.
9. Institutional Cryptocurrency Adoption
The increased adoption and investment by many people has led large companies and investors to show interest. With rising inflation and low investment rates, major financial houses like Goldman Sachs have found themselves in this area. They now offer opportunities in cryptocurrencies.
2022 is expected to be a groundbreaking year for cryptocurrencies and other instruments in many ways. Individuals will need to invest carefully after doing their own research and understanding the mechanics of this new method.
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