Following the massive success in the crypto market in 2021, there were high expectations from experts and general crypto users. There were mixed feelings as to how well the crypto market would turn out in 2022. This was generally due to the fact that toward the end of 2021, there was a massive decline in most of the digital coins. 

This decline led to fears and to some optimism about how the year 2022 would turn out in the crypto market. With the aid of some popular crypto brokers, many traders were able to make profits in the trading market in 2021. In this article, we would be considering some top predictions by crypto experts and the challenges they might encounter. 

Top 10 Expert Predictions

  1. A massive Crash or Rise in the Market 

While people do not see the crypto market crashing in 2022, it is safe to say that the prices of crypto could fall in 2022. As of December 2021, bitcoin had crashed to $46,000. This was after it hit its all-time high of $68,000 in November 2021. This decline gave rise to questions on the stability of the coin. However, the demand for crypto is expected to rise despite the setback it faced as more people demand crypto and utilize it in their daily transactions. 

2. Rise in Bogus Crypto Currency Affiliates

The crypto market is with misleading individuals who hoax investors and crypto traders of their profits. It is estimated that there might be some dubious transactions in the market as crypto prices rise. In 2021 only, more than 46,000 people reported losses as they fell into some questionable transactions. Over $ 1 billion was lost in that year only.  

As the prices of coins rise, people might get emotional and will be lured by scammers who present fake investment opportunities to them. They also use fake testimonies to lure unsuspecting individuals. Therefore, it is important to keep emotions aside when you want to trade crypto. 

3. Increase in demand as rigid Crypto regulations are made

 Experts and crypto investors believe that there might be a wider acceptance of crypto by more people as the government roll out regulations that favour the crypto market. There is a need for strict regulation of some crypto policies as scammers have continued to look for loopholes to defraud people. When people feel their investments are safe, they become more comfortable investing. 

Also, it is predicted that crypto would be more acceptable to the government and some organizations as this acceptance will yield a more positive result for the crypto economy. 

4. The use of Crypto will promote financial inclusivity among the marginalized segment of society

It is predicted that investors should expect billions in value to be distributed in the market every day in 2022. It is also anticipated that more than 500 million people would own at least one digital cryptocurrency at the end of 2022 making it to be more acceptable in society. 

5. Launching more crypto-friendly services by financial institutions 

Since the creation of cryptocurrency, there has been a void in the relationship between the crypto world and centralized financial institutions. However, over the years there has been some acceptance by some financial institutions. In 2022, it is predicted that more acceptance of the crypto market would be embraced by the mainstream financial institutions. 

In addition, it is predicted that more crypto-friendly services would be rolled out by mainstream financial institutions since cryptocurrency is gaining more popularity among the people. This is would help them attract more customers and retain their existing customers.

6. Increased Volatility is expected with a steady rise in price 

The crypto market is a very volatile market. This is not expected to slow down considering it is its nature. Experts have predicted that there would be serious volatile movement in the market. This volatility could be a positive trend or a negative trend. But one thing is sure, there would be an increase in the price of some of the digital coins.

For some experienced traders, market volatility is an attraction. Depending on your style of trading, this expected sharp volatility could be icing for some traders. It creates possibilities for higher returns using strategies like “buying the dip” and “selling at high”. However, careful analysis needs to be carried out on a particular coin so that a quick move in the wrong direction will not blow off your portfolio. 

7. Most ‘meme’ coins could disappear

In 2021, some ‘meme’ coins skyrocketed by more than 10,000 per cent in less than a week only to crash massively soon after. The price surge in some of the coins could not be maintained as investors were not convinced of the project. This led to amateurs losing a lot of funds in the coin.

Granted, some of these ‘meme’ coins might be projected as the next big thing but soon after they disappear. 

Before you invest in a project, it is important to consider the future and stability of the project. This will save you the stress of losing your investments and blowing off your portfolio. 

8. Cryptocurrency in 2022 might either outperform or underperform

Cryptocurrency has performed as a risk-on asset and is predicted to amplify the behaviour of the stock market. It is speculated that if the stock market surges in 2022, crypto trading will likely perform better than expected. But if the stock market underperforms, there is every likelihood that the crypto market will underperform too. 

Cryptocurrencies are risky and speculative in nature. Therefore, if risk assets decline, it will help in fighting off inflation and in that circumstance would be a primary beneficiary. 

9. There could be a ripple effect due to market difficulties in 2022 

It is predicted that difficulties in the mainstream financial market could cause a short-term price trajectory on some crypto assets.  

10. Steady Movement Toward Decentralized Finance 

In 2021, we saw Defi expand in unimaginable ways. It is predicted that in 2022, decentralized autonomous organizations and decentralized finance might likely chart top in the areas of crypto. Defi makes it possible to have a traditional financial product without an intermediary. In 2022, there would be more concentration on this network as the crypto community continues to expand. 

There are many predictions surrounding the future of cryptocurrency. No matter the predictions and projections surrounding crypto, staying focused on building your portfolio would help you stand out and avoid fake projects that might not be in tune with your style. 

By varsha