It is difficult to remember just how unpopular cryptocurrencies were 12 months ago. 2021 was a phenomenal year for cryptocurrencies; it is the year that digital currency attracted mass attention. From the depths and highs of Bitcoin and Etherum to the Coinbase IPO, and the explosive interest generated by non-fungible tokens, and of course the Shiba Inu coin, it is right to say that 2021 was a crypto year.
Cryptocurrency is the most trusted alternative to traditional coins and notes, primarily because it relies on Blockchain technology. Moreover, countries are actively establishing legislative guidelines to increase people’s trust levels in digital currency.
At some point in 2021, the global cryptocurrency sector held a market share of over $3 trillion, making it the 8th largest economy in terms of GDP.
So what will follow in 2022? We get the feeling that the answer is “a lot”.
Mason Nystrom, a senior crypto data analyst, notes that “The exciting part of 2022 is that crypto is no longer at this point in time where it will have a single narrative.”
Here are a few major trends around cryptocurrency that you should watch out for as the year progresses.
Reduction in Crypto Frauds
Yes, this is the year to deal with cryptocurrency-related fraud. Criminal activists have in the past taken advantage of the decentralized and anonymous nature of the digital currency sector. Countries worldwide are coming up with stringent rules to guide crypto transactions and trading activities. The regulations are expected to make cryptocurrency transactions transparent and reduce fraud cases.
The recent multi-million dollar Squid Game token scam has exposed the soft underbelly of online transactions, a wake-up call to regulatory bodies to make laws that will protect investors from online scammers.
Building strong compliance regimes will mean that suspicious activities can be traced and bogus fraudsters effectively exposed.
As such, financial regulators, global legislatures, and the judiciary need to pull together to ensure that crypto business is seamless and free from fraudsters. The hopes are that the scam statistics will reduce in 2022.
Robust regulations across countries
Different countries are trying to develop laws to offer guidelines for crypto taxation and transactions.
For instance, the US has published bipartisan bills offering the much-needed guidance of cryptocurrency transactions.
In Spain, a new law that contains guidelines to deal with tax fraud rampant in cryptocurrency transactions was recently published.
Moreover, some countries already have regulations requiring crypto-asset holders to declare their crypto net worth and any interest earned from digital assets.
The Eurozone and UK are also making efforts to set up crypto regulations that will oversee crypto transactions and taxations in these regions.
Singapore, Miami, and London will seemingly be the world crypto hubs in 2022 as there will be proper crypto regulatory regimes in these areas.
More businesses will start accepting cryptocurrency in buying and selling goods and services
The essence of creating bitcoin was to facilitate payments without going through banks and financial institutions. Currently, over 18,000 businesses accept cryptocurrency as a payment gateway, and the numbers are increasing by the day.
Notably, El Salvador was the first country to embrace digital currency as part of its legal tender. Banks with the necessary technology in El Salvador accept cryptocurrency, particularly Bitcoin.
Interestingly, in Spain, Banco Bilbao Vizcaya Argentaria (BBVA) is supporting their customer to carry out transactions and trade using digital currency.
These two scenarios point to the possibility of more countries adopting cryptocurrencies as legal tender in 2022.
Holding Digital Currency Savings Accounts will Become the New Normal
Cryptocurrencies such as Ethereum, Stablecoins, and Bitcoins can be saved in digital accounts to earn passive income. Analysts opine that staking cryptocurrencies will gain traction as a way for investors to make extra money in 2022.
Investors can make 5–20% annually, depending on the amount of crypto they stake. It is interesting to note that at the moment, over $9 billion is generated in revenue per year from cryptocurrency staking.
It is expected that the launch of Ethereum 2.0 will lead to massive adoption of crypto staking. With this, the revenue from crypto staking is expected to increase to $20 billion in 2022, and possibly double to $40 billion by 2025.
Ultimately, staking will be a new assets class that investors will use to make “idle” or extra digital currency earn revenue.
AI-Backed Identity Verification Systems
Just like conventional financial institutions, digital currency exchanges are prone to fraudsters. As such, crypto dealers must create a fraud-free space where their customers feel safe, and their investments are secured.
This is where IXFI comes in. We use Blockchain technology as the first layer of digital verification solutions. Moreover, our KYC system, Anti-Phishing Codes, and Block Verification for every withdrawal will ensure that your funds are completely protected for seamless trading in 2022.
It’s the right time to be your best trading self, so let Your Friendly Crypto Exchange guide you on your way. Register on IXFI today for a seamless experience.
Disclaimer: The content of this article is not investment advice and does not constitute an offer or solicitation to offer or recommendation of any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives and specific financial and fiscal circumstances.
Although the material contained in this article was prepared based on information from public and private sources that IXFI believes to be reliable, no representation, warranty or undertaking, stated or implied, is given as to the accuracy of the information contained herein, and IXFI expressly disclaims any liability for the accuracy and completeness of the information contained in this article.
Investment involves risk; any ideas or strategies discussed herein should therefore not be undertaken by any individual without prior consultation with a financial professional for the purpose of assessing whether the ideas or strategies that are discussed are suitable to you based on your own personal financial and fiscal objectives, needs and risk tolerance. IXFI expressly disclaims any liability or loss incurred by any person who acts on the information, ideas or strategies discussed herein.
