The Future of Cryptocurrency – Motley Fool
Cryptocurrency investors were on edge when 2021 rolled in. The price of leading token Bitcoin (CRYPTO:BTC) was up 309%, and Ethereum (CRYPTO:ETH) had climbed 459% over the previous year. But the last massive surge in 2017 was followed by an ice bath in 2018. Was the crypto market headed for another sharp correction in 2021?
As it turns out, the positive market momentum of 2020 carried over into strong gains in 2021. Both Bitcoin and Ethereum shot higher, followed by thousands of altcoins getting their first taste of mainstream success. It’s been a rocky road with lots of speed bumps, but the general market trend has pointed steadily upward.
The 2022 calendar will answer some important questions that were left unanswered in previous years, setting the course for cryptocurrencies and their investors for the long run. Here’s what to expect.
Image source: Getty Images.
Crypto market predictions for 2022
It’s impossible to say exactly what will happen to the cryptocurrency market in 2022 and beyond. Questions are far more numerous than answers. But by keeping an eye on a few overarching tendencies of crypto, you will be able to make better investing decisions as the market continues to evolve.
Three particularly important details need to be followed:
As these issues develop and are resolved, the long-term future of the cryptocurrency sector will take shape. A clearer picture should emerge by the end of 2022. Even so, a series of baby steps that started with Bitcoin’s 2009 creation is likely to continue for many more years.
Why cryptocurrency could be the future of money
In one best-case scenario for 2022, regulators around the world will come up with a global framework for crypto regulation. The Biden administration has put together a highly qualified team to steer the cryptocurrency regulation process led by U.S. Treasury Secretary Janet Yellen and the chairman of the U.S. Securities and Exchange Commission, Gary Gensler. Yellen has been tracking this sector for years, although sometimes taking a skeptical view. Gensler taught classes on bitcoin, blockchains, and other cryptocurrency topics at the Massachusetts Institute of Technology in 2018.
With highly knowledgeable people setting the tone for future regulations, there’s real hope that a workable system can be developed for investors, consumers, cryptocurrency businesses, and traditional banks. Informed regulators will understand crucial and meaningful issues such as the differences between a value storage system such as Bitcoin and a sophisticated ledger with smart contracts such as Ethereum.
As government entities hammer out a legal framework and taxation system, cryptocurrencies could find their way into the digital wallets …….