9 trends for the crypto market that should be booming in 2022
2021 is over and the time has come to plan for 2022. Cryptocurrencies are stronger than ever and it is necessary to assess several aspects, such as economic, political and health trends so that traders can invest consciously and with more knowledge in the year to come, thus increasing your chances of earnings and success in the crypto world.
But in order to plan investment for the next year, it is necessary to start with a reflection on 2021 and the most important thing that happened that year.
2021, the year of volatility
Price drop: We started the year at the height of the Coronavirus pandemic. Although the scenario has improved, there is still a great oscillation in the financial market and fear of new variants, which continues to affect cryptoassets. The drops in prices for Bitcoin, Ethereum and cryptocurrencies in general in recent months have been attributed to fears about the spread of the Omicron variant of Covid-19. Another factor that contributed to the losses was the expectation that the Federal Reserve, the US central bank, could accelerate its plans to withdraw monetary incentives in the face of rising inflation and the resumption of the labor market.
Chinese government X cryptocurrencies: To add more pressure on the cryptocurrency market, in May, the Chinese State Council published a memo about a meeting at which top officials commented on specifically cracking down on “bitcoin trading and mining activities.” We know that China has strict regulations on the cryptocurrency market, but that doesn’t mean that the Asian country is abandoning possibilities in a variety of digital technologies. China has increasingly considered that blockchain can become an economic, political and geopolitical asset if properly guided. In addition, it has been applied in many scenarios so much so that the Chinese government has launched its own digital currency – the digital yuan.
Contrary to the Chinese government, we saw El Salvador adopt Bitcoin as its official currency. The measure is still in the process of being accepted and experienced by the population of the country, but it demonstrates a trend that can be followed by other nations.
Popularization of crypto assets: despite volatility, cryptocurrencies are increasingly popular. The number of investors has increased exponentially in Brazil: the growth was 938% in 2021 according to research carried out based on data from B3 and CVM (Brazilian Securities and Exchange Commission).
9 trends for the crypto market in 2022
Bitcoin and other cryptos: despite having gone through a lot of price fluctuation in 2021, I believe that Bitcoin will not lose its position as the most powerful coin on the market. However, other cryptoassets have shown promise, such as Solana (SOL), Avalanche (AVAX) and Axie Infinity (AXS). Another coin that I believe will stand out in the coming year is the Polkadot(DOT); it has a protocol in order to connect all the blockchains which is something very revolutionary within the cryptocurrency market.
Carbon Credit Tokens: another trend that will come strong in 2022 are the carbon credit tokens, such as MOSS (MCO2). People and companies are increasingly committed to environmental conservation, so nothing more natural than investing in a carbon credit-backed token used to offset greenhouse gases. Many traders are already investing in these types of cryptocurrencies in the US and I believe the same will happen in Brazil in the coming months.
Fan tokens: Atlético Mineiro, Cruzeiro, Corinthians and Flamengo are some of the Brazilian football clubs that, in recent months, have launched products called fan tokens, which are basically a type of cryptocurrency. The fan token is created specifically for a crowd and guarantees exclusive benefits, such as discounts on official products, tickets, etc. The objective is not to generate financial returns, but it is a way for the fan to support their team, generating revenue for the club. Fan tokens proved extremely popular. Flamengo (MENGO) debuted breaking a world record by selling one million tokens in 12 minutes – so I believe that other fan tokens will be launched in 2022.
NFTs: in 2021, NFTs had a big growth and gave more impetus to the market. During the pandemic, people are more likely to seek a decentralized way of trading or investing, and this is one of the origins of the growth of the NFT. I believe it is promising, not only because it is a driving force for creators of art or games, as they have greater autonomy over their works and make them more profitable with the help of technology, but also because it expands the crypto-assets market to a larger community.
In 2022, the trend will continue. As the Metaverse concept becomes more popular and predictable, NFT technology will be applied more and more in different scenarios. As demand for them increases, companies large and small will develop their own strategies for NFT, and the NovaDAX is no exception. We will soon launch our own NFT platform, the first NFT marketplace with commercial and social functions in Brazil. It will be dedicated to providing NFT lovers with a dynamic community where they will be able to interact directly with each other and with the creators, and with faster and easier access to enter the Metaverse. There is great news ahead and we are very excited about it.
Market regulation: Brazil is moving towards having specific legislation that will regulate the cryptocurrency sector. In December, the Bill (PL) 2303/15 on the subject was approved by a vote in the Chamber of Deputies and will now go to the Senate. The regulation should come into force in 2022. With it, the market rules will become clearer, reducing the chances of scams and schemes such as pyramids and, consequently, increasing the possibility of safer investments.
Companies adopting crypto as payment models: more and more private companies are investing in cryptocurrencies and using them as a form of payment. These actions popularize crypto assets and consumers can use Bitcoins, for example, to shop online. This trend will gain even more strength in the coming year.
Celebrities acting and affecting the market: crypto assets are on the rise and it is common to find celebrities publicizing their investments in this market, such as Tesla CEO Ellon Musk. In a May tweet, a follower asked Musk what his opinion of Ethereum was, and the CEO jokingly replied that DOGE has dogs and memes, the others don’t. This was enough to take the value of the crypto asset to the highest levels! Tweets, interviews, speeches by famous people, etc. will continue to influence the market in 2022 and traders have to be on the lookout for them.
Elections: in 2022 we will have state and president elections, which will most likely polarize Brazilian society. Of course, this will affect the financial market, especially the stock exchange, and also the cryptocurrency market. Investors have to be aware of these fluctuations to invest at the right time, maximizing gains and minimizing losses.
Pandemic: every month the situation of the pandemic changes. It appeared that it was under control in Europe, but cases have increased exponentially with the new Omicron variant. In Brazil, this trend has changed with decreasing cases and numbers of deaths and the rapid increase in vaccination coverage. This constant change directly affects the financial market, so monitoring the situation of the Coronavirus pandemic is something that investors will have to do carefully in the next year.
If 2021 was the year of cryptocurrency consolidation, 2022 will be the year of their diversification. Traders will have more and more investment options, so their chances of winning are getting higher and higher. However, for this to occur, it needs to make its investments consciously, strategically and based on the political, economic and health trends that will affect the market. I am confident that 2022 will be a very positive year for the crypto market, both in Brazil and in the rest of the world.