Bitcoin Trends for 2022 From the Experts
2021 was a fairly successful year for Bitcoin, we saw it increase in both adoption and interest. We even saw it hit its all-time-high price in the last half of the year. There were so many milestones in the crypto sphere, starting with the first Bitcoin-linked ETF to major companies accepting that they would be accepting Bitcoin as a form of payment.
Figure: Crypto predictions for 2022 (source CNBC)
Indeed, crypto outperformed other asset classes including stocks, commodities, and gold. Most investors expected Bitcoin to end 2021 on a much higher note than it did. They also expected it to begin the new year on a much higher note than it did.
With the way things are going, investors seem unable to predict Bitcoin trends for 2022. For this reason, they are asking experts what to expect this year. Below is a summary of Bitcoin trends in 2022 according to experts.
Bitcoin trends for 2022
- Continued High-level Correlations with Equities
Bitcoin should continue to act as a portfolio diversifier, as it avails commercial services to those who had remained unbanked all over the world. It is critical that BTC is treated as a portfolio diversifier for people to keep being able to access it. Being such a young asset with a tremendous adoption rate, it is to be expected that there will be a correlation with equities. Ultimately, this adoption will probably cast BTC as a hedge thus diminishing the correlation with equities.
Experts expect the correlation to dissipate in the coming years due to the diverse applications of the different cryptocurrencies.
- Stablecoin Regulation at the Forefront
With Republicans and Democrats having conflicting desires, there will likely be a partisan split on the issue. In 2022, we should expect the issue of finalizing an approach to stablecoins to continue being of major focus. Stable coins regulation will likely be a regulatory action that we will see this year. However, with the lack of consensus, it is likely to be a soft touch.
It is still unlikely that we will see a comprehensive legal framework for crypto this year even with pressure from concerned parties. Investors should remain hopeful for relatively swift and hopefully constructive regulation.
- Cryptocurrencies are classified as securities.
Experts seem to believe that many of the digital currencies currently being traded will be treated as securities. Although some experts are still adamant about not recognizing crypto as security, most seem to be having a change of heart. Sensible regulations of crypto-focused products such as staking and lending cryptocurrency will enable such products to flourish.
- Continued growth and adoption of Bitcoin as a form of payment
Last year, we saw businesses and individuals warming up to the idea of paying for goods and services using Bitcoin. This year we should expect a continuation in people paying and getting paid with Bitcoin.
Experts have claimed that this is going to be the year of global cryptocurrency adoption as entrepreneurs work on bridging the gap between decentralized currencies and the centralized world of finance using underlying technologies. We should also expect a significant increase in the Bitcoin use cases.
- Adoption by more central banks
Experts have claimed that more nations will trail their digital coins this year. So much so to point that state-issued digital coins will begin to compete with cryptocurrencies. Central banks seem to be finally catching on with the rest of the financial world thus they will need to catch on to stay relevant.
More countries are expected to start working on CBDCs, scheduling several tests, trials, and rollouts this year.
- Embracing Bitcoin as legal tender
Experts are optimistic that this year, more countries will emulate El Salvador in adopting Bitcoin as a legal tender. Thye is confident that such countries will implement the necessary strategies to make the transition to digital currencies as smooth as possible.