5 trends to watch out for in cryptocurrencies in 2022

 5 trends to watch out for in cryptocurrencies in 2022

Unpredictable volatility, big business involvement, venture capital inflows, the environment, and regulation could be the hot spots for cryptocurrencies this year.

It's not easy to recall what cryptocurrencies were like 12 months ago. Coinbase's IPO, the rise and fall of Bitcoin, Ethereum, both Shiba Inu coin and the boom of NFT make 2021 the year in the heart of digital assets.

According to Fortune, there is much to look forward to in 2022. Macroeconomic conditions are changing rapidly, Washington is hotly talking about crypto regulations, large companies all over the world. Wall Street is more open than ever to investing in digital assets... These are going to be notable issues.

Volatility

Bitcoin, Ethereum and others are inherently volatile, however, in just a few short weeks, these cryptocurrencies have come a long way.

Starting 2022 at $46,000, the market cap cryptocurrency fell 14% over the next 10 days, falling back below $40,000. Bitcoin then rallied back above $43,000 and then plummeted to a low below $33,000, losing half of its value from its late November 2021 peak.

Other cryptocurrencies, including Ethereum, Solana, and Polkadot, as well as memes like Dogecoin and Shiba Inu, have all seen recent price swings.

It might be futile to pinpoint the real reasons behind such moves, but the volatility came just as the US Federal Reserve prepared to raise interest rates with inflation showing little sign of abating. reduce. And with more rate hikes likely, this is bad news for riskier assets.

So far, Bitcoin has reacted to news of high inflation and likely interest rate hikes as a technology stock rather than the digital gold that many believe in. Investors also have little experience dealing with Bitcoin in a high interest rate environment. Throughout the coin's life, since its launch in 2009, the Fed has maintained a relatively low interest rate ground.

All of this makes 2022 a pivotal year, potentially defining the role cryptocurrencies will play in investors' portfolios going forward.

The participation of big businesses

When will large enterprises participate in digital asset investment? After previous explosive rumors following market bulls, major US companies are seriously considering the possibility of investing in digital assets. Like Walmart, the retail giant, is moving to create its own cryptocurrency and NFT collection, according to Bloomberg.

BTCS has become the first Nasdaq-listed company to issue what it calls a "Bividend," which is a dividend payable in Bitcoin to shareholders. And others like Jack Dorsey, Tesla's Elon Musk, and MicroStrategy's Michael Saylor have put crypto at the heart of their operations, adding Bitcoin to the balance sheet. Fintech company Unicorn even allocated 5% of its balance sheet to stablecoins.

"There's a lot of talk about it," said Alex Song, Ramp's head of finance. "There are a lot of people trying to learn more about this."

Venture capital flow

According to Galaxy Digital Research, the inflow of venture capital into crypto and blockchain-related companies and projects has reached a record high. In the short few weeks of 2022, many well-known crypto companies have announced major fundraisers.

OpenSea, the largest NFT exchange today, raised $300 million in a Series C investment round announced on January 4, giving it a valuation of $13.3 billion. Lukka, a crypto data company, recently raised $110 million in a Series E round, at a valuation of $1.3 billion. A recent $1.15 billion investment in Citadel Securities also has a cryptocurrency slant.