Cryptocurrency’s popularity has skyrocketed in recent years, to the point that the alternative investment class has basically gone mainstream. While Bitcoin was the first and is now the most well-known cryptocurrency, hundreds of other cryptocurrencies have joined the market. Part of the rationale for the asset class’s buzz is the extraordinary returns achieved by certain investors. From March 2011 to March 2021, Bitcoin, for example, was the best-performing asset, with a remarkable 230 percent annualized return. The Nasdaq-100 ETF, symbol QQQ, was the second best-performing asset class during that time period, with “just” a 20% annualized return. But what does the future hold for the fast-expanding cryptocurrency market? Here are some of the most popular cryptocurrency forecasts for 2022.
Ethereum Could Overtake Bitcoin
Ethereum is not as well-known as Bitcoin, but it deserves to be. It is currently the second-largest cryptocurrency, and its growth has outpaced Bitcoin’s. If present trends continue, Ethereum might replace Bitcoin as the most valued cryptocurrency by 2022. This might make Ethereum an appealing option for investors wishing to diversify their crypto holdings beyond Bitcoin.
Cryptocurrency Will Become More Accepted as a Payment Source
One of the most serious criticisms leveled towards cryptocurrencies is that it is not recognized as a credible alternative for traditional currencies. If this scenario plays out, several cryptocurrencies may lose their value. However, the reverse has occurred in 2021, and the pattern appears to be continuing into 2022. As more companies continue to accept cryptocurrencies such as Bitcoin as legal cash, the viability and value of cryptos are expected to rise.
Central Banks Will Create Their Own Cryptocurrency
China has been in the forefront of the campaign for nations to adopt their own central bank-issued digital currency. Many other governments are looking to consider launching their own digital currencies in order to counteract the dangers posed by current cryptocurrencies. Countries may avoid the uncontrolled, decentralized nature of existing cryptocurrencies by administering and controlling their own digital currency.
Some, and Perhaps Many, Cryptos Will Become Valueless
While broad trends toward cryptocurrency adoption appear to be improving, with thousands of cryptos contending for a spot in the business, it’s inevitable that some, if not many, will lose all of their value. Bitcoin, the industry leader, still has a slew of significant investors lining up against it, implying that the value of Bitcoin will eventually reach $0. If the largest and most well-known cryptocurrency collapses, there will most certainly be little support for the thousands of lesser cryptos that aren’t nearly as valuable or accepted.