Cryptocurrencies have new challenges for 2022

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This year there should be a strong movement of products and services designed for the metaverse

key points

• For experts who follow the crypto universe, we are in the most important phase for investors

• Price volatility is expected to be even greater

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The past year was marked by the consolidation of the cryptocurrency market, with an appreciation of bitcoin, but also with the growth of other digital assets, as well as the expansion of services and new currencies. For 2022, the outlook is for maturing, especially regarding the regulatory issue and the impact of the economic recovery and the monetary policies of large economies. There must also be a strong movement of new products and services designed for the metaverse, which must also gain scale in the real world.

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Bitcoin's swings

The price of bitcoin started last year near US$30,000 and in December it was at US$50,000, an increase of almost 70%. The level of US$ 50,000, however, came after bitcoin almost reached US$ 69,000, hitting a price record in early November, at US$ 68,990. From January to December, bitcoin accumulated a 59.3% appreciation. Despite the price fluctuation, the crypto asset was one of the investments that yielded the most in 2021.

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The definitive year

For experts who follow the crypto universe, 2021 can be considered one of the most fundamental years for investors in the cryptocurrency market. The consolidation and start of the regulatory process for various financial products for the retail and institutional market, such as the Bitcoin and Etherum ETFs, in addition to the futures ETF approved in the US, opened the way for the crypto-assets sector to expand. in a way never seen before.

In Brazil, three crypto ETFs were launched in 2021: HASH11, famous for being the first crypto asset ETF in the country, in the first half of the year, and which became one of the index funds with the highest funding on the Brazilian stock exchange; BITH11, a product with 100% exposure to bitcoin and a sustainable footprint, and the Hashdex Nasdaq Ethereum Reference Price Index Fund (ETHE11), with 100% exposure to Ethereum.

In addition to the three products launched by Hashdex, QR Asset Management launched two ETFs dedicated to crypto assets: QBTC11, with 100% exposure to bitcoin, and QETH11, also with 100% exposure to Ethereum.

Other top cryptocurrencies

The year 2021 also consolidated the idea that this market goes beyond bitcoin. Ethereum has quintupled in value, driven by the success of protocols that run on it, such as some of the leading Defi (decentralized finance) and NFTs.

 

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The other side of bitcoin

The market intelligence team at exchange (broker) Binance points out that bitcoin’s dominance (which is the currency’s weight in the total market value of crypto assets) has steadily declined, from around 70% to around 43%. On the other hand, the altcoin space (all cryptos accept bitcoin) has increased, mainly ETH, BNB (Binance Coin), and USDT (Tether).

Another strong trend is NFTs, which are a type of crypto asset that gives the buyer, in a digital way, ownership or some kind of right over products and services. NFTs can be applied to various digital items such as art, music, texts, video games, and even memes.

In addition to the rise of NFTs, blockchain games have also emerged, introducing one of the most revolutionary concepts in the cryptocurrency market: play to earn, in which the user earns money for playing, highlighting the growth of metaverses, such as the game Axie Infinity and The Sandbox.

What are the prospects for cryptocurrencies in 2022?

The year should be marked by volatility even higher in prices, with room for appreciation. Among the triggers of this movement, there are the processes of adoption of bitcoin as legal tender in some countries, as happened with El Salvador.

The year will bring specific challenging scenarios with, for example, the presidential elections in Brazil that will affect the financial and cryptocurrency markets. On the other hand, some coins will have significant growth and should fall in the taste of investors, such as carbon credit tokens, used to offset greenhouse gases, and fan tokens, such as those launched by Flamengo and Corinthians in 2021. , and which are already very popular in Europe and the United States. As a trend for the year, there is the metaverse, with the virtual world connecting with the real.