2021 will definitely be a record-breaking year in crypto history and a year in which crypto continues to mature. Entering 2022, what changes will the crypto market usher in? Many institutions have given various forecasts in terms of encryption trends, regulatory trends and macro market conditions.
Crypto Market Trend Prediction
On January 6, according to the latest data from digital currency management company CoinShares, cryptocurrency funds have experienced investment outflows for three consecutive weeks. CoinShares said outflows from the crypto industry totaled $32 million last week, with outflows over the past three weeks totaling $260 million, with overall inflows in 2021 reaching $9.3 billion, a 36 percent jump from 2020. It is worth mentioning that compared with other digital asset investment products, Bitcoin has the lowest increase in capital inflows. In addition, according to the latest research report by blockchain data provider Glassnode, among many on-chain indicators, Bitcoin is generally inactive and liquidity is getting worse, while investor profitability and cyclical indicators paint a more for a pessimistic picture. Glassnode concluded that a continued consolidation is expected in early 2022 as bull and bear signals balance .
Former Wall Street trader and bitcoin advocate Max Keizer reiterated his belief that bitcoin will hit $220,000, but changed his prediction to 2022 as his previous prediction for 2021 ultimately failed to materialize. According to a tweet by Keizer, he believes that the computing power behind the network, known as hash power, precedes the price of cryptocurrencies, meaning that new highs in hash power will translate into new highs in price. Bitcoin’s hash rate increased 49% year-over-year, from 136.5 exahashes per second (EH/s) in early January 2021 to 203.5 EH/s this week, an all-time high.
Deflation could replace inflation in 2022, according to Mike McGlone, senior commodities strategist at Bloomberg.Commodities peaking and falling U.S. Treasury long-term bond yields point to a possible revival of deflationary forces in 2022, which will have a positive impact on Bitcoin and gold. Bitcoin is on track to hit $100,000, while gold is trading at $2,000.
Intelligence and data firm S&P Global suggests that cryptocurrencies and decentralized finance will continue to grow in 2022. In its latest report, the company examines the current state of the market and notes that while there are still serious issues that could hinder adoption, the industry will continue to grow by complementing traditional finance in the year ahead. According to the report, tokenization can also be a powerful force in helping people invest in assets that would not be possible without these tools. In other words, tokenization can offer the possibility of democratizing opportunities. Regulation will also be an important part of next year, and the industry still needs “a regulatory framework that recognizes the rights of token holders and smart contract protocols.”
CNET’s 2022 crypto predictions point out that crypto will go further into the mainstream ; NFTs will create new ownership mechanisms; the industry will face bigger hacks and bigger ransoms; stablecoins will play an important role; and new crypto rules will come to light.
El Salvador President Nayib Bukele tweeted his Bitcoin prediction for 2022. 1. Will reach $100,000; 2. More countries will adopt it as legal tender; 3. Will be a major election issue in this year’s US election; 4. Bitcoin City will begin construction; 5. Volcano bonds will be oversubscribed .
Crypto Mainstream Trend Forecast
Forkast.News released its predictions for the crypto industry in 2022, noting that there will be three major trends: DeFi goes mainstream, regulators will follow; NFT use cases continue to expand as the metaverse is established; the rise of DAOs will change our lives , work and engagement.
Finch Capital released its 2022 forecast report on European Fintech , in which, the report pointed out that Crypto/DeFi has become mainstream, and the adoption of Crypto and DeFi by enterprises has paved the way for the global popularity of encryption. The report also said that the increase in CVC investment funds in this field has also contributed to the global upgrade of policy supervision.
Coinbase publishes 10 predictions for the web and crypto-economy in 2022 , including increased scalability of Ethereum, but significant growth in new Layer1 chains; significant improvements in usability of L1-L2 cross-chain bridges; zero-knowledge proofs Technology will gain more attention; regulated DeFi and on-chain kyc proofs will emerge; institutions will play a greater role in DeFi participation; DeFi insurance will emerge; NFT-based communities will bring substance to Web 2.0 social networks Sexual competition; brands will start to actively participate in Metaverse and NFT; Web2 companies will wake up and try to enter Web3; DAO 2.0 era is coming.
Canadian businessman and celebrity investor Kevin O’Leary said in an interview: ” I think NFTs will be bigger than Bitcoin. NFTs provide so much value in identity verification, inventory management and various use cases across different asset classes. I prefer NFTs related to hard assets, physical assets; I have made significant investments in Immutable Holdings, which owns NFT.com, which launched in January, and WonderFi, a company that integrates assets in the crypto space. To make these non-volatile There is a lot of work going on for ubiquitous and liquid NFTs that can be traded on any blockchain. These assets are going to be huge, and I think 2022 will be the first year of NFTs. “
The Block publishes 2022 predictions: L2 ecosystem will experience higher growth rate than L1 ; ZK-rollups (ZKRs) will have more adoption than Optimistic rollups (ORU), with StarkNet leading the charge; mining experts More than 30 publicly listed bitcoin mining companies are forecast by the end of 2022; structural market experts predict that 2022 may witness the approval of futures-based ETH ETFs, but not spot-based BTC or ETH ETFs. Additionally, some analysts believe that the Ethereum 2.0 merger will happen by the end of 2022 .
Prediction of Regulatory Policy Changes
In a recent interview with the Financial Times, Benoit Coeure, head of the Innovation Centre at the Bank for International Settlements (BIS), revealed that the global cryptocurrency regulatory framework could be ready by 2022. Coeure noted that, given that cryptocurrencies are rapidly entering the mainstream, now is the time for full regulation. The former ECB executive director seems particularly concerned that the rapid growth of DeFi poses a threat to traditional finance (TradFi), creating “systemic risks.” Coeure claims that different jurisdictions may propose a piecemeal approach to cryptocurrency regulation, which is globally inefficient. However, he believes there is still enough time to avoid regulatory arbitrage and establish a global regulatory framework for the emerging asset class. Coeure also said protecting consumers should be a top priority for policymakers. He therefore proposes to bar pension funds from gaining exposure to cryptocurrencies to avoid the associated risks.
A few days ago, Blockfi co-founder and senior vice president of operations Flori Marquez discussed the future prospects of cryptocurrencies heading into 2022 in an interview with Yahoo Finance Live. “In the coming year, we will see more U.S. consumers entering the space for the first time,” she said. “Secondly, we will see “talent recycling,” with many people changing jobs due to the Covid-19 pandemic, and crypto Money and fintech are hugely attractive.” She also noted that2022 may see greater regulatory clarity.
Bloomberg Intelligence analyst Mike McGlone shared his outlook for the future of the cryptocurrency market. Incentivized by the Chinese ban and the proliferation of revolutionary technologies like cryptodollars and NFTs, we expect the U.S. toembrace cryptocurrencies in 2022 , with proper regulation and associated bullish price implications, Bitcoin appears to be in the $ 100,000s, McGlone said. On track, we may see pauses, corrections and updates to the bull market. The unlimited supply of fiat currencies should sustain price gains, especially in Bitcoin and Ethereum with limited supply, and we expect wider adoption to prevail and overcome most volatility, such as a near-50% correction in 2021.Additionally, some normalization of stock market returns and continued declines in U.S. Treasury yields could impact Bitcoin and Ethereum in the portfolio. As we approach the start of 2022, the key question facing Bitcoin is whether it will peak or continue to consolidate a bull market. We believe it is the latter, and in such a world, the benchmark cryptocurrency is on its way to becoming a global digital collateral. Key support in 2022 could be around $50,000, with resistance around $100,000.
In an interview with Bloomberg, FTX CEO Sam Bankman-Fried said that not only in the United States, but globally, the regulation of cryptocurrencies will become clearer in 2022. He said the government’s stance would help boost cryptocurrency trading, greatly facilitating the entry of big investors. He also said that 2022 will mark the beginning of a major breakthrough in stablecoin regulation, with the SEC and CFTC likely to become more involved.
Stablecoins and CBDC predictions
Forkast founder and editor-in-chief Angie Lau said that if 2021 is a landmark year for cryptocurrencies, then 2022 is likely to mark a sea change in the digital asset space, as state-issued digital currencies will remain strong. No matter how you look at it, 2022 appears to be a breakthrough year for CBDCs , and as the CBDC race gathers momentum, a key question is: Can the monetary authorities of those countries achieve a breakthrough in 2022? Can the monetary authorities of those countries that have launched CBDCs, and dozens of others seeking to develop them, allow private cryptocurrencies to coexist with them? Rather, do they have the political will to do so? If not, the current Mexican wave in the cryptocurrency space could conceivably be a tsunami.
Forbes has released predictions for the crypto market and blockchain for 2022. The article said that NFTs will become boring in 1.2022. Especially since there are many misconceptions about the operation and valuation of NFTs in the mainstream market, what is often overlooked is the true value and usage of NFTs. 2. Stablecoins will become mainstream. According to the Presidential Working Group report, stablecoin utilization increased by 500% between October 2020 and October 2021, and this rate of adoption does not appear to be trending down . 3. Crypto payments are here to stay. With the adoption of crypto-asset payments by major organizations such as PayPal, Visa and Mastercard’s trend to use crypto-assets for transactional purposes in 2021 appears to be permanent. 4. Bitcoin will reach $100,000, rising inflation, continued monetary easing around the world, and the proliferation of cryptoassets all point to the conclusion that cryptoassets are here to stay.
Sean Stein Smith, a professor at the Lyman School of the City University of New York, wrote that stablecoin-friendly policies could help make 2022 a breakthrough year for the industry. Smith believes that some policy provisions can and are expected to accelerate the rapid adoption of stablecoins : distinguishing stablecoins. To further develop and expand the opportunities for stablecoin usage, a distinction needs to be made between stablecoins and other cryptoassets.Currency competition is a good thing. Competition is a good thing, and the best components of different tools will be incorporated into whatever option eventually makes it mainstream. Simpler reporting requirements. The current reporting obligations appear to be more appropriate for cryptoassets that are more volatile than stablecoins. It is understandable that government authorities want to collect taxes in due course; in this case, that is not the problem. The problem is that the rules that have been implemented seem to artificially undermine the primary use case for the tool in question (stablecoin). The article concludes that entering 2022, this is the best time to revisit, revise and improve the rules and policies related to stablecoins. Stablecoins can play a key role in providing bridges and on-ramps for market participants at different levels of expertise; effective policies can go a long way towards achieving this goal.
Macro environment change forecast
A congressional subcommittee is preparing a hearing to examine the environmental impact of cryptocurrencies, especially bitcoin mining, three people familiar with the matter said. The Oversight and Investigative Subcommittee of the House Energy and Commerce Committee is apparently working on a roll of witnesses to explain proof-of-work cryptographically verified energy use, especially for the Bitcoin network. The timing and list of witnesses have yet to be determined, but the hearing could take place as early as the end of this month. A source involved in pre-hearing discussions with the subcommittee said the committee had become particularly concerned given recent events in New York state.
Citigroup strategists expected , 2022 global economic growth will slow and inflation momentum, and continue to overweight equities. Strategists including Jamie Fahy said they expect growth momentum to slow because risk-reward has deteriorated as the current cycle progresses and inflation in emerging markets is expected to peak earlier than in developed markets. They wrote in the report that a shift towards relative values on government bonds and credit and increased risk in some emerging markets, remained bearish on base metals and neutral on energy.
TD Securities believes the dollar could strengthen in 2022 as the Fed prepares to raise rates as early as March.Analysts at JPMorgan also said: “Recent Fed speech suggests March (rate hike) is on the horizon, and we continue to believe risk/reward appetite will respect this outcome, supporting a stronger dollar in the new year.” At the same time, They expect EUR/USD to consolidate in the 1.12-1.14 range, but there is also a risk of a sharp break below that range as rumours about the eventual direction of the balance sheet could push U.S. real interest rates higher.
On January 5, Goldman Sachs believes that as long as the Federal Reserve keeps raising interest rates gradually, the dollar will decline moderately this year . Goldman Sachs strategist Zach Pandl wrote in a research note that the dollar is more likely to fall this year than rise, a view that deviates from consensus. Risks to the greenback in early 2022 are skewed to the upside. The Canadian dollar will be the best performer among the G-10 currencies this year, while the Australian dollar will be the worst performer. Unless the ECB turns to raising interest rates, its policy normalization will not be able to support the euro.
UBS said that the S&P 500 will show different performances in the first and second half of 2022, and it is expected to rise in the first half of the year and then fall back in the second half. The S&P 500 could rise above 5,000 in the second quarter of 2022, buoyed by an expected 13% EPS hike, while a decline in Covid-19 cases is expected to offset tightening financial conditions, strategists led by Keith Parker wrote Influence. Cost pressures are expected to continue in 2022, with slowing EPS growth coupled with Fed rate hikes and political uncertainty expected to bring the S&P 500 back to 4,850 by the end of the year. Financials, energy and value stocks are expected to outperform in the first half, helped by higher yields, Fed rate hike expectations and strong EPS momentum.
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