Cryptocurrency had a big year in 2021, as Bitcoin values rose (and then fell), Coinbase came to the public and Dogecoin gained popularity thanks to public support from Elon Musk and Mark Cuban. But 2022 could be an even bigger year for cryptocurrencies, predicts Jennifer Schonberger, chief correspondent at Yahoo Finance and cryptocurrency expert.
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Below are Schönberger’s predictions for the cryptocurrency boom in 2022.
Cryptography will become bigger and more widespread
“According to a study conducted by PYMNTS and BitPay, about 60% of the population is showing interest in making cryptocurrency purchases in the future,” Schönberger said. The cryptocurrency market is currently worth over $2 trillion and has grown exponentially over the past few years. While this may seem small in the global financial market in general, the cryptocurrency continues to grow at a rapid rate and participates in a part of the payment system that is expected to continue beyond 2022.”
Crypto has made great strides in recent years and is set to continue on its growth trajectory until 2022.
“For reference, in October, the first exchange-traded bitcoin-linked fund was launched, providing exposure to the most widely traded cryptocurrency for any investor with a brokerage account,” Schonberger said. “Cryptocurrencies are also used to purchase real estate and pay commission to real estate agents, which demonstrates how it has become a part of our payment system and that crypto will be part of the future for consumers.”
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Schonberger believes that cryptocurrency has the potential to become as mainstream as the internet.
“Cryptocurrencies will gradually be integrated into our lives similar to the way the Internet was done,” she said. “We have gone from telephony to broadband with the internet. With encryption, we are in the telephony phase, and once we get to broadband, people will be more familiar with it and we will see more everyday applications in our daily lives.”
Some of the reasons coding is becoming more and more popular is that it is likely to become more regulated and less volatile in the near future.
“Right now, cryptography is still new and largely unregulated, but that is changing,” Schonberger said. Congress is looking to adopt a new regulatory framework as the industry looks to offer more options for implementing the technology. We will see cryptocurrencies used more for payments, and people will be able to use their credit cards to pay with cryptocurrencies, making it more popular. With increased demand, this is likely to mitigate volatility in actual currencies.”
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Cryptocurrencies will be privately embraced by Generation Z and women
“Generation Z as a whole has more access to technology than previous generations, which can play a huge role in the attractiveness of cryptocurrency,” Schönberger said. “They are more aware of and exposed to these topics. Also with the advent of TikTok, social media has sparked a greater interest in financial literacy in general. We have already seen a huge rise in audiences from all backgrounds coming to Yahoo Finance this year, with significant growth in both audiences Females and Generation Z.”
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Schönberger said that as these two groups become more interested in investing, it is only natural that they become more interested in cryptocurrency as an investment vehicle.
“Cryptocurrencies are attractive because they are a whole new asset class to invest in along with stocks and bonds that can offer a lot of upside despite their volatility,” she said. “Crypto is essentially new software and the backbone of the internet that is changing the way we handle money and the way business is done. There are endless possibilities for crypto – some applications we can see and some we can’t yet. Crypto also offers sources of income New to people doing research and investing right, and I think Gen Zers and women, in particular, are recognizing these opportunities.”
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Impulse and Meme Coins are here to stay
It used to be that Bitcoin and Ethereum were the ultimate cryptocurrency, but in 2021, many other currencies grew in popularity. For example, Dogecoin started as a joke, but is now the tenth largest cryptocurrency by market capitalization, with a valuation of $30 billion. But not all “meme coins” prove to be a good investment. In November, Squid Game Crypto SQUID crashed completely as it was revealed to be an obvious scam, after a 3,600% increase.
“It is important that you fully understand what you are investing in and do your research,” said Schönberger before investing in any new bustling cryptocurrency. “Many fall victim to making impulse investments after watching a meditative 30-second clip on social media or following quick trends. Our guideline at Yahoo Finance is to invest in reputable companies, seek expert and professional advice, and most importantly, do your research first around trading applications to ensure they are validated and can provide support when needed.”
Remember that even if a cryptocurrency is reputable, there will always be some risks involved.
“At the end of the day, you have to weigh your risk tolerance,” Schonberger said. “Investing in cryptocurrencies is very volatile; you need a strong stomach for that and a long-term outlook. This is a very new asset class that will take decades to expire. Do not invest money in cryptocurrencies that, if you lose, will hurt you financially. However, the rule of thumb in investing is that The higher the risk, the higher the potential reward, and this certainly applies to cryptocurrencies.”
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This article originally appeared on GOBankingRates.com: Yahoo experts predict 2022 will be an even bigger year for cryptocurrencies