What’s next for crypto in 2022?

No matter your stance on crypto, there have been some major developments in the space in 2021. It’s officially hit the mainstream in terms of awareness and adoption, “NFT” was even word of the year, this has seen calls for tighter regulations, industry rules, and crackdowns on crypto mining operations in nations such as China and Russia.

Not all governments have been belligerent towards crypto. The country of El Salvador is accepting Bitcoin as legal tender, the first country to ever do so. Companies are also moving to embrace the space, most famously with Facebook inc. changing its name to Meta, coinciding with its increased focus on the metaverse, and at the same time, expanding eligibility for running cryptocurrency ads on their platform.

The crypto market has had a record year, all the top-five coins by market cap (excluding Tether) hit all-time highs this year. So, what can we expect in 2022 from crypto?

To get an overview for what to expect from crypto in 2022, I spoke to Craig Jackson, Head of Growth at the Australian cryptocurrency micro-investing app, Bamboo, and Co-Host of the Crypto Curious Podcast, which aims to explain the basics of crypto and discuss new trends.

Play-to-earn blockchain games: the on-ramp to Web 3.0?

“Next year is a big year for play to earn games,” Jackson said, “Axie Infinity rose in popularity this year, so expect these other play-to-earn platforms like Star Atlas or Monster Infinity to do the same. Everyone is hyped on the metaverse, and Web 3.0, but it’s not 100 per cent here yet, we’re too far off, so the blockchain games are the on-ramp, they’ll help the transition into Web 3.0.

“NFT’s that have use in game, in the play-to-earn space, they’re the ones which will be popular in 2022. I believe they’ll (NFT’s) really transition over to the play-to-earn’s,” Jackson added.

Jackson isn’t the only one with this sentiment, Nick Saponaro, co-founder and CEO of Divi Project, a decentralised payment ecosystem, stated that Initial Game Offerings will become popular, and expects organisations like GameStop and Epic to make plays at some point in 2022.

Regarding the metaverse, others believe it’s much closer than we expect. By next year, “the metaverse will become the new interface for people to engage with the Web and each other,” Justin Banon, co-founder of decentralised network, Boson Protocol, said

Brock Pierce, chairman of the Bitcoin Foundation, said that in 2022 we should expect a battle between crypto-native metaverse’s and ones launched by gaming and corporate entities like Meta.

Shane Molidor, chief revenue officer at AscendEx, said most people will “operate day-to-day jobs partially in the metaverse.” The CEO of crypto startup, Meow, Brandon Arvanaghi, went as far as to suggest that 2022 will be the year where a Fortune 500 crypto company will declare its official headquarters to be on one of the metaverses.

DEX’s (Decentralised Exchanges) to be a big hit

When asked about cryptocurrencies specifically, Jackson believes decentralised options may rise to popularity, similar to decentralised exchanges.

“The options space is currently dominated by a centralised exchange called Deribit, with a lack of other exchanges, it’s only natured for the crypto space to try to find a decentralised alternative,” he said.

“Even if you’re not looking at options, decentralised exchanges have a lot of choice. Take an exchange like UniSwap for example, which is completely decentralised, you have a choice there of nearly two thousand coins, compared to a centralised exchange like Binance which has just over 350.”

That said, others think that the adoption of decentralised exchanges, or DEX’s, may cause some big losses. According to Benjamin Whitby, who oversees regulatory affairs at cross-chain protocol Qredo, “next year will see the world’s first billion-dollar hack as DeFi activity continues to increase,” he told Business Insider.

ETH layer 2’s “will be huge”, could flip BTC

When speaking on the two largest cryptocurrencies by market cap, Bitcoin and Ethereum, Jackson stated that Ethereum layer 2 solutions will see much higher adoption due to Ethereum gas fees.

“Gas fees are too high, if you’re buying an NFT, it often costs more in gas fees, and sending small amounts of Ethereum is out of the question, that’s why I expect layer 2 solutions will be huge next year.”

The market might not only look to Ethereum’s layer 2 solutions for relief from gas fees, but possibly other layer 1 solutions as well. In a recent video, popular cryptocurrency analyst and trader Michaël van de Poppe states that both Avalanche and Solana will continue to grow in popularity, and compete with Ethereum due to their lower gas fees, transaction times, and higher scalability.

Despite the comment about high gas fees, Jackson still remains bullish on Ethereum.

“Ethereum will hit the top spot for market cap and flip Bitcoin sometime next year, I don’t know when, but it won’t be for long, maybe a week tops, if that,” he said.

Tom Higgins, CEO at asset management platform Gold-i agreed, giving a prediction that Ethereum’s price will rise at a much faster rate than Bitcoin, due to the move to proof of stake.

“Everything we’ve talked about, the play-to-earns, NFT’s, layer 2’s, they all need Ethereum, and that’s why it may overtake Bitcoin in market cap.” Jackson said.

Bitcoin might break six figures

Jackson remained bullish on Bitcoin as well, when asked about what will happen with Bitcoin he expected it to hit a new all-time high in 2022.

“Bitcoin will potentially push through the US$100k barrier,” he said, “Tesla was the major catalyst in 2021 to push Bitcoin to new highs, I suspect more governments and companies will adopt it”.

The adoption of crypto by governments is also a sentiment shared by Rohit Talwar, a futurist, and CEO of Fast Future. Talwar predicts that at least 25 countries will be using a central bank digital currency by the end of 2022, and that will be either their own, or one issued by another country, such as China’s digital yuan.

“Bitcoin has every reason to continue to grow, inflation is enormous,” Jackson said, “you’re not going to earn much interest leaving it in your bank.”

“Crypto’s hit the mainstream now, it’s easier to buy than ever before, retail investors want a hedge against inflation.”

Jackson isn’t alone in his bullish outlook on crypto. Talwar said that the crypto-economy market capitalisation will rise from a peak of $US3 trillion in 2021 to over $US7.5 trillion at some point in 2022, a 150 per cent increase.

Meanwhile, the head crypto analyst at Bloomberg Intelligence, Mike McGlone, predicts Bitcoin may gain the upper hand versus stocks next year.

Crypto could have its own ”S&P 500”

Jackson’s final prediction was aimed at index tokens and investor attitude.

“Investors are becoming wiser, and have realised they need to diversify crypto investments, index tokens will really come into their own next year.”

“You have ETFs and your S&P500, ASX200 etc, that’s going to translate to crypto, you’ll be able to buy into the ‘DeFi Top 50’, or the ‘Metaverse Index’, potentially a gaming index will come along.”

On what else Bamboo had in store for 2022 Jackson mentioned its new rewards program.

“Something we’re really excited about, from as soon as next week, we’ll be rewarding our users with BAM token simply for completing actions like topping up and having reoccurring deposits turned on in the Bamboo app.”

“Unlike other rewards programs, you’ll be able to sell your BAM tokens for cash anytime.”

“We have a lot more in store for BAM token, like exclusive product features, but that’s to come, there’s going to be a lot more utility provided in the future.”

Whatever next year holds for crypto, ensure you do your own research on your potential investments, and consider the risks of cryptocurrency investing. The information contained within this article is not financial advice, and we do not endorse any product discussed within.