are entirely digital. This blog provides a detailed list of 10 promising cryptocurrency trends to watch
for in 2022.
1. Carbon credit tokens
Carbon credit tokens, such as MOSS (MCO2), will become increasingly popular in 2022. It makes
sense to invest in a token backed by a carbon credit used to offset greenhouse gases because crypto
users are becoming more and more committed to environmental preservation. These crypto-related
activities have already attracted a lot of traders investments globally.
2. Companies adopting cryptocurrencies as payment models
More and more private companies have started to invest in cryptocurrencies and used them as a
form of payment. These actions popularise cryptocurrencies and allow crypto users to use Bitcoins,
for example, to make online purchases. This trend will gain even more momentum next year.
3. Bitcoin remains the “king”
Although Bitcoin dominance declined in 2021 and investors started to look for alternatives such as
Ethereum, Solana and Polkadot, BTC is still the main “heavy” cryptocurrency. Demand for it and its
derivatives will increase. BTC has a low collateralisation ratio and low leverage and can be used as
DeFi collateral. Bitcoin holders will be able to use more of their Bitcoins for loans, credit, providing
liquidity, etc. More of the Bitcoin supply will be deposited on other blockchains. Bitcoin continues to
mature in terms of institutional ownership.
4. Cross-blockchain bridges
Bridges enable the transfer of assets between blockchains. Bridges come in three varieties:
centralised, paired, and swaps. Centralised bridges are controlled outside the chain by a trusted
counterparty, and the other two types are smart contracts inside the chain. Pairwise bridges lock an
asset into a smart contract and create a representation of the asset on the paired chain. Swaps allow
users to pay tokens on one chain to receive the corresponding representation on another. Instead of
locking tokens, market makers, either human or automated, are used as counterparties for the
cross-chain swap.
5. DeFI and liquidity
Several new promising protocols have recently emerged. One trend may be the development of
fractional reserve banking and off-chain credit scoring systems. The centralised exchanges are
currently profitable, but they are also looking to expand their business. Market forces drive all
decentralised order books to share and connect content at this point. In addition to faster trading,
companies can save businesses millions of dollars in exchange rate fluctuations. Decentralized
exchanges will be able to identify and share order volumes, enabling shared economics. Therefore,
consumer and professional trading systems will become more straightforward and user-friendly.
However, implementing this model requires a lot of underlying infrastructures.
6. NFTs
Their potential is enormous, as they can be used to transfer rights to both virtual and physical
property. Thus, there is a need to find out how NFTs can be handled, held and valued by traditional
institutions such as museums, funding, and so on.
7. Regulation
More and more institutional investors have begun to recognise cryptocurrencies as a legitimate
investment opportunity, even though comprehensive regulation is still underway. The
cryptocurrency market is too big to ignore. At the same time, macro “adoption” of blockchain/digital
money will intensify. A greater focus on CBDCs and stablecoins is expected to help diversify and
lower transaction costs, reduce cross-border frictions, complement deposits, promote financial
inclusion, etc, proposing a bank-like regulatory structure for stablecoin issuers.
8. Data-driven protocols will come into vogue
One factor that will accelerate cryptocurrency adoption in 2022 is digital transformation. The result
was a large amount of data. As a result, open source data-driven protocols emerged. The main goal
is to enable businesses and individuals to exchange and monetize data and data-driven services.
Thus, data-driven protocols will quickly gain popularity in 2022.
9. Ethereum software upgrade
Ethereum undergoes a major software upgrade that moves it away from energy-intensive mining
and increases network capacity – both Bitcoin and Ethereum employ a ‘proof of work’ (PoW)
mechanism to validate information recorded on the blockchain and prevent certain types of attacks.
In 2022, Ethereum plans to move from ‘proof of work’ to ‘proof of stake’ (PoS), which will drastically
change the landscape for Ethereum-centric miners. Instead of spending energy on solving
computationally intensive problems (PoW), ‘proof of stake’ will provide better energy efficiency,
increased network capacity, lower barriers to entry and greater immunity to centralisation for the
Ethereum blockchain.
10. Crypto exchange-traded funds (ETF) approval
ETFs, a type of fund comprised of cryptocurrencies, are considered to be an element of the new
regulations affecting the cryptocurrency market. A cryptocurrency ETF follows the price of one or
more digital tokens based on investor sales and purchases; the share price of cryptocurrency ETFs
changes every day.
As the crypto world expands, the emergence of crypto shares is witnessed. This will allow
organisations to tie their ownership to a legally tokenised structure, reducing risk. In other words,
companies can exchange assets for easy trading and better liquidity to list them.
Crypto equity is a digital representation of the right to participate in a company’s liquidation. Some
people buy this equity, voting rights and dividend shares. They have the technological ability to
settle via a notional exchange of two types of tokens registered on the blockchain. Investors can buy
a small part of an organisation’s ownership by investing in these crypto shares.
Closing thoughts
Cryptocurrency has been the subject of extensive speculation; however, in reality, it is still a new
investment for businesses as the trends in cryptocurrency appear to be positive and the time is right
to venture into the crypto space. Agira, a modern forward-thinking firm, offers cryptocurrency projects to help clients to venture into the crypto space. We are a leading blockchain development
company with extensive experience working with niche technologies. Let’s talk.
