It’s astonishing to observe how cryptocurrencies are becoming more accepted by the masses. The cryptocurrency world is still growing and about to become bigger and better as more people jump on the bandwagon, hoping to make a fortune.
2021 can be attributed as the break-out year for the blockchain ecosystem and global cryptocurrency market. If one looks hard enough through the various data presented in cryptocurrency statistics, the recurring themes that one might find are all about growth and acceptance.
Infrastructure developments were significantly high last year, capitalization went through the roof, breaking previous records, and El Salvador became the first-ever country to adopt Bitcoin as legal tender.
These are just some examples of the exciting events within the cryptocurrency sector. So, if you want to jump in on cryptocurrency investing, here are the top four cryptocurrency trends in 2022 you need to know:
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1. Cryptocurrency Regulation
Transacting with cryptocurrencies can be done anonymously between account holders worldwide, which is why some governments are hesitant to accept crypto as legal tender.
There are currently 103 out of the 193 countries where crypto is legal or accepted. And although these countries accept digital currencies, majority of them still don’t have full-fledged regulations in place.
The recognition of digital money as a legitimate investment vehicle will be inevitable as more institutions realize and understand why the cryptocurrency market is growing steadily. As seen in reports, the macro-economic adoption of digital money will intensify as more institutions embrace blockchain technology; and more governments beef up their regulations.
2. Rise Of The Crypto Trading Bots
Another trend in the cryptocurrency market is the use of crypto trading bots. A crypto trading bot is specifically programmed to automate cryptocurrency trading based on several parameters set by the trader or by copying the trades of other crypto traders.
If you think the stock market or forex market is volatile, you may not have seen charts from the crypto market. The crypto market is highly volatile, and investors can lose millions of dollars in literally just a snap. Minimizing risk is why investors use bots for their trades.
With more interest pouring into this market, novice and expert traders alike have found different strategies to minimize risks, like combining copy trading with crypto platforms and crypto bots. This powerful combination helps crypto traders stay afloat in the market without demanding their attention and resources 24 hours a day.
3. Growth Of Decentralized Finance (DeFi) Applications
One of the most popular emerging technologies from the blockchain is DeFi. Decentralized finance is gaining much support as this system sidesteps the need for traditional financial intermediaries like brokers and banks through smart contracts.
A DeFi Pulse study reported the significant growth of smart DeFi contracts in two years. What started with USD$2 billion in total value locked (TVL) – a measure of how much cryptocurrencies in total there are in DeFi smart contracts, ended at just under USD$100 billion TVL by the end of 2021.
Many believers see DeFi as a new way of banking and using financial services. Individual users of DeFi apps perceive these systems as more secure and less costly alternatives to traditional banking. Moreover, the ability to earn higher income through crypto holdings is another benefit that crypto users highly appreciate.
4. Continues Growth Of The Non-Fungible Token (NFT) Market
NFTs are digital assets that represent real-world items like videos, in-game items, collectibles, music, and art bought and sold online with cryptocurrency. The NFT market, which has been around since 2014, eventually gained enough traction that in 2021 it was worth a staggering USD$41 billion.
The growth of NFTs empowers artists and content creators by giving them a space where they can easily sell their works without any third parties like auction houses or galleries at a price they control.
Doors of opportunity started opening up as the adoption of NFTs eventually penetrated various sectors like fashion, media, retail, and art through the collaboration of the big names in these industries with the giants of the tech world. The proliferation of NFTs created more purpose for cryptocurrencies, creating more hype around these systems within the blockchain.
As the digital landscape evolves into something more complex, it’s wise to expect more things in society to be touched by technology. There’s no harm in becoming an early adopter of things to come. So, keep in mind that doing your research before buying into NFTs, cryptocurrency, and other digital trends is much better than relying on what you hear from others.
Cryptocurrency and blockchain technology haven’t peaked yet, so it’s best to expect more changes as these systems become more accepted. It’s going to be an exciting roller coaster ride, so buckle up and equip yourself with knowledge before diving headfirst into the world of cryptocurrency.