The Future of Cryptocurrency Beyond 2022

The first half of 2022 was bad for cryptocurrencies. 

Bitcoin and Ethereum are down 50% from their 2021 highs. Despite recent gains, the crypto market remains mostly stagnant. Some analysts predict cryptocurrency prices might fall further before recovering.

Bitcoin set many all-time highs in 2021, followed by huge dips and institutional buy-in. Ethereum, the second-biggest cryptocurrency, hit a new all-time high late last year and then plummeted below $900 in June. U.S. authorities and the Biden administration want additional cryptocurrency laws.

Even so, people are still very interested in crypto. It’s a hot topic among investors and pop culture, thanks to people like Elon Musk and that kid from your high school who’s on Facebook. 

But the industry is still young and is always changing. This is why big drops can happen after every new bitcoin high.

What will happen to the rest of 2022?

Long-term trends are hard to predict, but in the next few months, experts will keep an eye on regulations and how institutions use crypto payments to understand the market better. 

Even though it’s impossible to make exact predictions, we asked five experts what they thought about the future of crypto:

Cryptocurrency Regulation

Legislators in Washington, D.C., and throughout the world are attempting to develop regulations and norms that will make cryptocurrency safer for investors and less alluring to hackers; thus, discussions over cryptocurrency regulation will continue.

2022 has seen some regulatory progress, yet more remains to be done. In March, President Biden ordered government agencies to explore the “responsible development” of digital assets, including stablecoins. The U.S. Treasury Department issued the first framework from President Biden’s executive order on digital assets, outlining how the U.S. should interact with other nations on digital assets.

In 2021, Federal Reserve Chair Jerome Powell indicated he had “no intention” of banning cryptocurrencies in the U.S. SEC Chairman Gary Gensler has spoken on his agency’s and the CFTC’s role in monitoring the market.

What New Regulation Could Mean for Investors

Regulation of cryptocurrencies can be a touchy subject, but many experts say it’s good for investors and the industry.

More rules could bring more stability to the crypto market, which is known for being very unstable. As long as it strikes the right balance, it could also protect long-term investors, stop fraud in the crypto ecosystem, and give clear guidelines to help companies innovate in the crypto economy.

Bitcoin’s Future Outlook

The Future of CryptocurrencyBitcoin is an excellent predictor of the crypto market as a whole, given that it is the biggest cryptocurrency by market capitalization and the rest of the market tends to follow its movements.

In November of 2021, Bitcoin’s price exceeded $68,000, establishing a new all-time high. In 2022, though, everything came crumbling down.

Bitcoin and the larger crypto market have been declining this year due to persistent macroeconomic uncertainty, primarily driven by skyrocketing inflation, a volatile stock market, rising interest rates, and worries of a recession. Since November of last year, Bitcoin has lost more than two-thirds of its value, falling as low as $17,500 in recent weeks. Experts disagree as to whether bitcoin has yet reached its bottom. Some claim it has already occurred, while others predict it might fall as low as $10,000 in 2022.

This volatility is a significant reason experts advocate limiting your first crypto holdings to less than 5 percent of your portfolio.

However, how high will bitcoin rise in the long run? Bitcoin has had a rough start to the year, but analysts still believe it will reach $100,000; it’s a question of when not if. Bitcoin’s history may give hints about what to anticipate in the future.

Ethereum’s Future Outlook

Ethereum is the second biggest cryptocurrency on the market and the most well-known altcoin. Similar to bitcoin, it may be used as an indicator of the crypto market. Its value has increased significantly over the last six years, from $0.311 at its introduction in 2015 to roughly $4,800 at its peak late last year.

Despite being a considerable distance from its all-time high, Ethereum’s price has the potential to soar throughout 2022.

This amount may rely on the success of Ethereum’s big upgrade, scheduled for September 19. Ethereum is shifting to a less energy-intensive system that insiders refer to informally as “The Merge.” The renovation also aims to improve the network’s efficiency, speed, and cost-effectiveness.

According to analysts, if Ethereum lives up to its promises with the merger, the price of ether might surpass $4,000 in 2022 and potentially reach $12,000. Investors are keeping a tight eye on every development leading up to the merger and, in some instances, are taking advantage of the present market drop by purchasing the dip in advance. According to analysts, only time will tell if Ethereum’s price will continue to rise or return to prior lows.

The Future of Cryptocurrency

We may guess what value cryptocurrencies may have for investors in the future months and years (and many wills). However, the fact is that it is still a new and speculative investment with insufficient historical data to make accurate forecasts. Regardless of what a particular expert believes or asserts, no one knows. Investing just what you are willing to lose for long-term wealth creation is crucial, and sticking to more traditional assets.

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