10 Crypto Forecasts For 2022 (Blockchain, Crypto, DeFi, And NFTs)

Introduction

10 Crypto Forecasts For 2022 is the Editor’s picks publishing, based on thorough research to give you the possible and logical outcomes in the crypto world in terms of Blockchain, Crypto, DeFi, And NFTs.

For the first time last year, the market capitalization of cryptocurrencies reached $3 trillion. Starting was less than USD 800 billion. DeFi now has a total value locked (TVL) of USD 100 billion on Ethereum alone. However, NFTs appeared to be the biggest surprise, boosted, and more widely adopted by complementary areas like metaverse and GameFi. No one can claim to have foreseen these developments. Predicting the future is extremely difficult. However, by following precise indicators and executing periodical evaluations we can have certain orientations and logical signs, tendencies, and trends allowing us to compose this 10 Crypto Forecasts For 2022 publishing and create the image of what can we expect to happen in the crypto world.

1. Reaching a $100,000 in price Bitcoin and the crypto-asset market will grow in breadth and depth

The first thing in the 10 Crypto Forecasts For 2022 publishing we want to mention as it became obvious to us is that scarce assets like Bitcoins (BTCs) are becoming increasingly attractive. Especially when inflation rates rise rapidly. What separates Bitcoin from other cryptos are multiple factors. Bitcoin is the pioneer in cryptocurrencies making it not only the oldest, but most decentralized, and best-known cryptocurrency which also has another distinctive feature compared to other cryptocurrencies, its limited supply of 21 million BTCs. With these features, it is very much within the realm of possibility that the BTC price will rise to more than USD 100,000 this year which goes in parallel with the backdrop of Bitcoin’s institutional adoption and the greater demand that comes with it.

Nonetheless, it is expected that the overall crypto-asset market will also grow. Since the beginning of 2021, the largest 20 cryptocurrencies listed on CoinMarketCap and their USD prices by market cap have increased by triple digits. It is evident that many native cryptocurrencies from alternative Layer-1 blockchain protocols (Alt-L1s) are traded as potential Ethereum killers (such as Solana, Binance Smart Chain, Cardano, Polkadot, Avalanche) are among the top 20. Certainly, crypto asset market investments are riskier than traditional investment opportunities, partly due to higher price volatility. Nevertheless, those of well-known market indices can be contrasted by the price performance of other

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cryptocurrencies. For instance, only a 17% increase in the MSCI World Index than it was at the beginning of 2021. On the other hand, the gold price trend is currently negative. The demand for crypto investment opportunities will continue: DeFi offers double-digit interest rates through liquidity provision, lending, and staking, whereas banks in developed countries quite often offer less than 2% on savings. This will occur as a result of the increasing number of wallet addresses, for example, measured by monthly active users of the MetaMask wallet (10 million active monthly users currently).

2. Ethereum is subject to upgrades and remains the dominant smart contract platform

The proof-of-stake consensus mechanism is expected to be established on the Ethereum platform this summer. It is also evident that the TradFi sector will allow financial institutions to enter the staking business. One can rarely invest in this market in a more risk-free way through ETH staking because staking rewards could thus become a kind of “prime rate” of the crypto asset market. Here, for example, one has the option to set up one’s own staking infrastructure or to resort to staking services such as those of Coinbase or Blockdaemon.

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ETH is evaluated to continue to have great potential in terms of price development, as do other Alt-L1 tokens. Ethereum still carries the largest transaction volume even though the share of those protocols and tokens that are mapped to Ethereum-based DeFi and NFT is decreasing. We took the freedom to put the Ethereum network in the second position in the 10 Crypto Forecasts For 2022 publishing as it is essential for the transformation of the blockchain through its smart contracts.

3. More sustainable Crypto investments

The next priority we are giving 3rd position in our 10 Crypto Forecasts For 2022 publishing is the inevitable exponential emergence of more eco-friendly i.e. green products and services of issuers of ETPs, crypto exchanges, mining companies, and financial institutions. To date, due to the relatively high carbon footprint of Bitcoin mining, many potential crypto investors have been reluctant to invest in Bitcoins. ESG regulations are applied to interested companies, subject to the regulations that they must follow.

However, for providers of crypto investments, some models calculate the required climate compensation for Bitcoin-based products. For example, a recent study by the Frankfurt School Blockchain Center outlines how by the purchase of emission allowances from the European Emissions Trading System (ETS)a Bitcoin transaction, as well as holding bitcoins, can be offset. In the former case, to offset CO2 emissions, $18 USD is required. In the latter case, a $100 USD emissions allowance must be purchased for assuming one holds a Bitcoin for a period of one year. With this trend, we can assume that the prices for CO2 emissions will increase significantly in 2022.

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In total, blockchain network operations and the energy mix they use are becoming increasingly green even today. After China’s crackdown on the country’s mining industry, mining companies pulled out of China. Renewable energy sources are becoming the focus of mining companies increasingly seeking to develop technologies for geothermal or solar energy, because of the cost structures such energy sources offer.

4. Paving the way for the decentralization of the internet by the establishment of a Web3 infrastructure

Potentially delivering internet architecture in a decentralized and autonomous way using blockchain technology Web3 represents a novel approach and method that will make increasing differences. The core of this approach is about reducing dependency on large “big tech” networks and IT service providers. For example cloud or internet providers, because they often handle the collected data in a non-transparent manner, representing a “single point of failure”. They can also operate a partly arbitrary product and pricing policy due to an oligopolistic market environment.

Web3 is primarily based and focuses on the idea of putting the users of the internet back in control of data and infrastructure. Web3 offers a wide range of possibilities. Starting from decentralized data storage via blockchains such as Arweave or Filecoin, decentralized wireless networks such as the Helium network, tokenized platforms, and projects where all decisions are done on the side of the community, to reach completely new ways of identity management. Because they can provide a sustainable incentive system that encourages network users to provide the required infrastructure over the long term cryptocurrencies are play a key and important role in this context.

5. A new source of income from NFTs and blockchain-based gaming

The Metaverse, which is a complete shift of our everyday activities is a virtual platform on which people can collaborate, interact and trade economically. Without NFTs and blockchain-based infrastructures, these digital economies would be hard to imagine. “GameFi”  through the Axie Infinity and the launch of the Ronin sidechain represented a turning point in 2021, which enabled the throughput necessary to allow one million active players to hop in the Axie Infinity universe in August 2021. Especially in the Philippines, Axie Infinity has become a source of income for many in general.

Several major companies Apple, Microsoft, and Facebook have announced that they are setting up their approaches to digital worlds, i.e., “metaverses”. From the past experiences, we can be assumed that these internet giants will develop a largely centralized, partly closed system, so that value transfers to other digital ecosystems will be made more difficult or even impossible. However, this is contradictory to the philosophy of Web3, which focuses on individuals with clearly defined property rights and freedom of action with the help of blockchain technologies.

The multi-chain is expected to dawn in 2022, and it remains exciting to wait for the dawn. We can expect a new massive wave of adoption once value transfers are seamless across different crypto-universes, and the NFT and blockchain-based gaming economy, in particular, could receive a further boost. When pioneering economies are established for the first time, the employment sector could undergo structural change. When all these sectors achieve the highest level of interconnectedness and compatibility such an interconnected economy could arguably be considered a “meta-metaverse.” What sounds like it is a long way off could become reality quite quickly, i.e., in 2022, especially in certain areas of gaming.

6. A multi-chain world becomes a reality

There was a fierce debate on which smart-contract-enabled blockchain ecosystem will prevail which slowly came to an end in 2021. After all the indicators we have come to the prevailing opinion that we will live in a multi-chain world in which multiple blockchains can transfer information and value between each other. Because of this, naturally, we will see the ratio between the TVL on Ethereum and the TVL of all blockchains steadily decrease. The big difference is measurable, a year ago, it was 90%, and today, it is only 62%. From these standings, it is foreseeable that Bitcoin will remain the number 1 blockchain and Ethereum the number 2 blockchain in 2022. Entering into a competitive relationship with Layer 1 blockchains, another relevant development will be rollups (zero-knowledge and optimistic roll-ups) or Layer 2 protocols. While leveraging the security of the underlying base layer they promise lower transaction fees and faster transactions. In addition, through bridges and cross-chain protocols interoperability between different blockchain ecosystems will be established diligently. Last but not least, there are efforts to establish a kind of Layer-0 through the Polkadot and the Cosmos Inter-Blockchain Communication Protocol (IBC, which is a network of different blockchains capable of communicating with each other).

All these solutions are public blockchain solutions interesting and important to note. Closed Blockchain infrastructures are playing a lesser role even though they were expected to find application in an enterprise context just a few years ago (enterprise blockchains or permission blockchains) with significant importance attached to them. Platforms such as Hyperledger or R3 Corda are primarily affected by this. For sure, on these access-restricted infrastructures, there will be applications developed. But it is already evident that public blockchains have won the race. And this is something that can be calculated and can be determined by metrics such as transaction throughput, transaction volume, market capitalization (of mapped assets), or even developer activity.

7. Regulations and prohibitions have become more legally clarified  

This year 2022, it is expected many countries to make a statement on how they will regulate and manage crypto assets. It remains to see whether countries will tighten restrictions and introduce bans, like China, or whether they will take a crypto-friendly approach as seen in El Salvador which adopted Bitcoin as an official currency alongside the U.S. dollar in September 2021.

Issues like AML, KYC, taxes, and stablecoins are what regulators will be focused on, and will explore the viability of DeFi regulation in exchanges with regulators from other jurisdictions. An important aspect to note here is that the Markets-in-Crypto Assets (MiCA) regulation will also come into effect, allowing the provision of a unified legal framework at the European Union level and creating more legal clarity for service providers and issuers of crypto assets. When this comes to place, it can be assumed that Europe and North America are leading towards the fundamentally “crypto-friendly” path. Provided that rules such as money laundering prevention, identification of transaction partners, and taxes are observed, decentralized protocols such as Bitcoin and Ethereum will be tolerated.

8. As a large-scale stablecoin the digital euro will still not exist

Many predict that the digital euro can in theory exist as a central bank digital currency (CBDC), as a trigger solution, or as a stablecoin. However, until 2026 at the earliest, the European Central Bank (ECB) is not expected to issue a CBDC. Bahamas or Nigeria are the countries where CBDCs already exist. This year, for the first European commercial banks and as a trigger solution, the digital euro will emerge and will be made available for the industry and the financial sector. However, because this type of digital euro virtually does not require the involvement of the ECB, the initiative of commercial banks will become crucial here. This year 2022, the digital euro will still only exist as pilot projects in the form of a stablecoin.

For euro stablecoins, significant volumes as with U.S. dollar stablecoins are not to be expected. We have two reasons for why is that so. First, stablecoins are not interest-bearing assets, and second, at the same time issuers would have to pay negative interest to the ECB. Financial regulators are expected to pay special attention to stablecoins and enforce strict requirements after MiCA regulations have come into force. On the other hand and with this background the significant further growth of U.S. dollar stablecoins is very probable.  Consequently, the “dollarization” of the crypto-asset market will intensify.

9. The real progress is adoption by institutional investors and large corporations

Over the past year, many institutional investors and large companies have also made their interest in digital assets. Institutions such as the Sparkasse or Raiffeisen-Volksbank came on board including services like hedge funds, asset managers, and family offices, but also pension funds. Major banks now, such as JP Morgan or Goldman Sachs are beginning to develop a range of offerings around crypto investments. In the wake of above-average inflation rates, a persistently low-interest-rate environment, further fields of application, and the consequent increase in demand are factors that drive this wide adoption. To combat the expansion of the money supply, which has already led to relatively high inflation over the past year, tech companies such as Microstrategy and Tesla hold billions of dollars in Bitcoins.

When we speak about the giants, Zuckerberg’s Meta even goes one step further by declaring itself one of the future key players of the metaverse. Furthermore, it is expected to see increased M&A activity. We have already seen such activities, for example, PayPal has acquired the startup Curv (custody and IT security technology in the field of crypto assets) and Coinbase has acquired the company Unbound Security (custody technology and focus on cryptography).

10. Social and economic coordination handled by DAOs

Collectively-owned and managed by their members, Decentralized Autonomous Organizations (DAOs) are blockchain-based, decentralized organizations that follow pre-defined rules via members voting using tokens. Crowdfunding, social clubs, human resources, or collective investment projects are only some of the exciting use cases., In the treasuries of the top 20 DAOs, there is $14 billion USD, trending upward – according to Consensys. Some examples of DAOs are Syndicate, MakerDAO, ClimateDAO, and ConstitutionDAO.

This year 2022, it is anticipated that countless new DAOs will emerge. This is so because anyone can create a DAO for any purpose especially because DAO builder tools are easy to comprehend and use. So, DAOs are expected to become omnipresent in the domain of crypto. It is also anticipated to scale primarily if questions about the extent to which DAOs are affected by existing regulations and in which jurisdictions they have to answer in case of doubt can be clarified.

Conclusion

Within the conclusion of this editor’s picks publishing on the 10 Crypto Forecasts For 2022, we want to note that the figures included in the article are largely based on data available to the author and researchers at the time of writing. Further, this 10 Crypto Forecasts For 2022 publishing does not constitute financial advice and should not be considered as an investment suggestion, nor a solicitation to buy or sell any particular crypto asset. In the crypto world, things change fast and transformations happen even faster. What was discussed in this publishing are the trends and the possible and logical sequences and outcomes in the crypto world and following these principles our researchers and writers have composed the 10 Crypto Forecasts For 2022 publishing in order to give you the facts arguments and expectations or logical followings within the domain. Additionally, we suggest you read The Most Common Crypto Tips And Mistakes When Trading, Investing or Volatility, Factors, And Profiting Explained And Demystified from our Wiki section in order to pack yourself with what you need before you start your journey. It is always the best way to do constant and extensive research i.e. your own research and reach a conclusion that gives you guarantees but also evaluations of any risks involved and see what outweighs what before you decide to take a dive into any investment.

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