Friday, October 7, 2022

Is It The End Of Crypto

The Future Of Crypto Adoption: 2022 Is Looking Strong

What happened to the Bitcoin price, is it the end of the crypto boom?

Crypto.coms tracking looks at the adoption of the market in 2021, and following the trend that 2022 might be following, the industry is on track to reach 1 billion users by the end of 2022. If more countries like El Salvador and Jamaica take the strong crypto-friendly stance, the industry will face not only a wave of new users taking up cryptocurrencies not only for investment but for functional use too.

Effect On Bitcoin’s Network

The most valuable and useful aspect of Bitcoin is its network. Distributed ledger technology is a technological solution to the time-consuming bookkeeping and accounting that characterizes most financial transactions today.

If Bitcoin becomes popular as a medium of exchange in the future, its transaction numbers will surge. Past precedent has shown that there is a significant chance that the network will slow down. This is because Bitcoin’s architecture, which relies on a distributed database to hold copies of massive ledgers, sacrifices speed for accuracy and integrity.

In such a scenario, it is likely that Layer 2 technologies, like the Lightning Network, will become responsible for confirming a majority of transactions on its network. Therefore, the cryptocurrency’s actual network itself will be used only to settle large batches of transactions.

A second possibility is that the number of transactions on Bitcoin’s network falls. Such a situation is possible when Bitcoin becomes a reserve asset. Trades involving the cryptocurrency will be few. Retail traders and small trading firms, who dominate its current trading ecosystem, will be eliminated and replaced by large institutional players and established trading firms. They will conduct fewer and more expensive trades that will incur high transaction fees from miners.

Has Bitcoins Bubble Burst

When assets rise very quickly in price, typically this makes a crash much more likely. Or at the very least a correction, when the price falls back down to a more normal level.

That is the situation bitcoin is in right now. Although no one can really say what is a normal level for bitcoin.

It took the cryptocurrency 11 years from launch to get to $20,000 per coin, but only three weeks for bitcoins price to double from there.

A decisive year for currency was in 2013. The Bitcoin price 8 years ago went from $13.40 at the start of the year to its height in December of $1,156.10, before falling to around $760 three days later.

Fast forward to 2020/21 and the price had soared by more than 700% in 12 months.

Where it is heading next is equally unpredictable.

Check out one Times Money Mentor readers crypto experience: Bitcoins rollercoaster ride has swept me to an £8,500 profit in less than a year

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Will Bitcoin Ever Reach The 21 Million Cap

Before delving into the implications of Bitcoin’s 21 million cap, it might be interesting to consider the question of whether it will ever reach that figure. Based on the cryptocurrency’s current codebase and mining process, some observers say that Bitcoin may fall just shy of the 21 million figure.

To recap, Bitcoin is “mined” by miners who solve cryptographic puzzles to verify and validate a block of transactions occurring in its network. Block rewards, consisting of a set number of bitcoins, are distributed to miners who successfully confirm a transaction block. The rewards are halved every four years.

When the cryptocurrency was launched, the reward for confirming a block of transactions was 50 bitcoins. In 2012, it was halved to 25 bitcoins, and it went down to 12.5 in 2016. In May 2020, miners stood to earn 6.25 bitcoin for every new block. Block rewards for Bitcoin miners will continue to be halved every four years until the final bitcoin is mined. Current estimates for mining of the final bitcoin put that date somewhere in February 2140.

The Bitcoin mining process provides bitcoin rewards to miners, but the reward size decreases periodically to control the circulation of new tokens.

Global Crypto Owners Near 300 Million Predicted To Hit 1 Billion By The End Of 2022

The End of the First Crypto Decade

Singapore, January 20, 2022 Crypto.com released its Crypto Market Sizing report that measures crypto adoption worldwide. The analysis, conducted by Crypto.coms industry-leading research team, found that the global crypto population increased by 178% in 2021, with crypto users totaling almost 300 million. The number of crypto users is expected to break one billion by the end of 2022.

Since the first edition of Measuring Global Crypto Users in June 2020, Crypto.coms market sizings reports have documented the world transition toward cryptocurrencies. The company regularly updates its on-chain market sizing estimates to account for the increasing number of players of both users and service providers in the crypto world, and predict new records in the global number of crypto owners for 2022:

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Is There Any Hope

Were certainly in a much different place now than we were 12 months ago. What was a hot commodity has turned into a hot potato nobody wants to touch. Still, this almost certainly wont be the end for bitcoin, or cryptocurrencies as a whole. Despite the realization that it was a bubble, even the toughest critics see some sort of a future.

Dow, the man who first shorted bitcoin, for instance, even mentioned in his initial post that a person can be simultaneously bullish on blockchain and bearish on bitcoin. And he just announced that hes ending his short.

Meanwhile, even the most enthusiastic bitcoin evangelists are realizing that a retooling is in order. Michael J. Casey, a senior adviser for blockchain research at MITs Digital Currency Initiative, recently wrote about how the crypto-winter has arrived, but it may lead to better things down the line:

The good news is that the glare of public opinion will eventually dissipate, and that as the spotlight diminishes, real developers will find themselves in a healthier environment within which to do the work needed to unlock this technologys potential. We saw a similar period of constructive building during the 2014-2016 hiatus.

But whatever new products are produced, they will now have a harder time struggling with acceptance. Whether we like it or not, message and image are important.

Bitcoin Is The Main Driver Of Growth

  • Bitcoin drove much of the growth and outperformed Ethereum adoption in the latter half of 2021. Bitcoin, the first-ever cryptocurrency, likely also gained market shares from altcoins. The weaker role of Ethereum as crypto goes mainstream is likely due to two factors: The emergence of alternative ecosystems that are direct competitors to Ethereum, like Terra and Avalanche together with Layer 2 solutions that bridge assets away from Ethereum to other chains.

For more details, download the full report here.

About Crypto.com

Founded in 2016, Crypto.com serves over 10 million customers with the worlds fastest-growing cryptocurrency and financial services platform. Crypto.com is built on a foundation of security, privacy and compliance and is the first cryptocurrency company in the world to have ISO/IEC 27701:2019, ISO27001:2013 and PCI:DSS 3.2.1, Level 1 compliance, and independently assessed at Tier 4, the highest level for both NIST Cybersecurity and Privacy Frameworks, as well as Service Organization Control 2 compliance.

With over 3,000 people in offices across the Americas, Europe and Asia, Crypto.com is accelerating the worlds transition to cryptocurrency. Find out more:

Crypto.com | Official Blog

Read Also: How To Get Started Mining Cryptocurrency

Negative News Spreading Fud

After the phase of euphoria of the end of 2017, we entered into a bear market driven by FUD sentiments. A vicious circle took place, aggravating progressively the market sentiment: negative news affecting prices, then decrease in price affecting the perception of the investors and increasing their level of FUD, then other negative news having more impacts on price because the level of uncertainty is higher, etc. Here are the most impacting negative news of the last weeks:

Bans

Centralization is a point of failure, this is exactly why crypto exists in the first place. Decentralized exchanges are being built fast and their adoption will bring safety and efficiency to the crypto markets.

Ukraine War Raises Questions About The ‘end Of Monetary Regime’ And Role Of Bitcoin

We’ll continue to see volatility in bitcoin, but it’s not the end of crypto: FTX president

Bitcoin will probably benefit from a new world monetary order where the US dollar no longer reigns supreme and Chinas currency strengthens through the backing of Russian commodities, a report from the major investment bank predicted, triggering intense debates in the crypto community.

We are witnessing the birth of Bretton Woods III a new world order centered around commodity-based currencies in the East that will likely weaken the Eurodollar system and also contribute to inflationary forces in the West, the newly published report said.

It further went into detail on the economic fallout of the war in Ukraine, which it said is turning into a crisis for the commodity market, given the Western sanctions aimed at the single-largest commodity producer of the world, which sells virtually everything.

As a consequence of this, the report written by Credit Suisse investment strategist Zoltan Pozar said Russian commodities are collapsing in price, while commodity prices outside of Russia are rallying. This situation is similar to how certain other markets in the US diverged during the 2008 financial crisis, Pozar argued.

If we are right, and if this is a crisis of commodities a 2008 of sorts thematically, if not in terms of size or severity who will provide the backstop, the report asked.

Money will never be the same again after this war, the report further said, before concluding:

and Bitcoin will probably benefit from all this.

____

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Is This Time Any Different Than The Last Time For Crypto

But this time was a little different than last time. The Toronto Stock Exchange did not allow BTC trading, but it authorized a Bitcoin ETF that can trade on the TSX. The ETF can hold BTC in virtual storage and allow investors to get exposure to the price fluctuation of this treasure trove. The ETF is perfectly legal and regulated. Moreover, large companies like AT& T, Microsoft, and Tesla are willing to accept BTC as a mode of payment. Hedge funds started investing in BTC.

All these developments got investors, especially the critics of fiat currency, hopeful that BTC could become the global currency of the future. But the crypto is still exposed to regulatory crackdown due to the lack of rules to control the digital currency.

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It is however, catching on. Nearly twenty million Chinese are hooked up to an experimental digital yuan run by the Peoples Bank, whose intention is that the 2022 Winter Olympics in China will serve as a showcase event for the digital yuan. Small, advanced economies notably Switzerland and Singapore are to the forefront in planning digital currencies as is the Bank of England, which egged on by the strategic urgency created by Brexit, may be the first large central bank to roll out a digital currency .

Rolling out CBDC

It strikes me that the ingredients necessary for this sort of manoeuvre are a well banked and financially literate population, one that is well penetrated technologically, and a central bank with a very good policy and regulatory brains trust. .

Digital central bank currencies can achieve a range of aims from making the transmission of money a cheaper and faster process , a potentially more secure banking system, and the possibility to rebuild decrepit banking systems . Two other factors are prominent.

Power

So, if central bank independence and their outsized role in the political economy will be called into question, the counterveiling argument, for the larger central banks at least, is the geopolitical value in rolling out digital central bank currencies. Indeed, Chinas announcement that it was advancing its digital currency project has prompted the Fed and the ECB to flag their own programs.

Emerging currencies

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Broader Institutional Cryptocurrency Adoption

Mainstream companies across industries have taken interest and in some cases themselves invested in cryptocurrency and blockchain in 2021. AMC, for example, recently announced it will be able to accept Bitcoin payments by the end of this year. Fintech companies like PayPal and Square are also betting on crypto by allowing users to buy on their platforms. Tesla continues to go back and forth on its acceptance of Bitcoin payments, though the company holds billions in crypto assets. Experts predict more and more of this buy-in.

Weve seen a tremendous amount of inflow of attention, and thats going to continue to drive the growth of the industry for a while now, says Abner.

Some experts predict bigger, global corporations could jumpstart this adoption even more in the latter half of this year. What were looking at is institutions getting involved in crypto, whether its Amazon or the big banks, says Weiss. A huge retailer like Amazon could create a chain reaction of others accepting it, and would add a lot of credibility.

Indeed, Amazon has recently sparked rumors that its making moves to that end by sharing a job posting for a digital currency and blockchain product lead. Walmart is also recruiting a crypto expert to oversee its blockchain strategy.

‘a Big Year On The Regulatory Front’

Crypto Price Prediction: Bitcoin To Overtake The Dollar ...

Regulators flexed their muscles on cryptocurrencies this year, with China completely banning all crypto-related activities and U.S. authorities cracking down on certain aspects of the market. Analysts widely expect regulation to be a key issue in 2022 for the sector.

“2022 will be a big year on the regulatory front, no doubt,” Luno’s Ayyar said. “The interest from various governments, and especially the U.S., to bring regulation into the crypto space has not been higher.”

Ayyar said he expects to see some clarification on the legal “gray zone” of cryptocurrencies other than bitcoin and ethereum, which the SEC has said are not securities.

Blockchain company Ripple is locking horns with the U.S. watchdog over XRP, a cryptocurrency it is closely associated with. The SEC alleges XRP is an unregistered security and that $1.3 billion worth of the tokens were illegally sold by Ripple and two of its executives. For its part, Ripple says XRP should not be considered a security.

Also Check: What Are The Us Based Crypto Exchanges

New Users Predicted To Enter The Market

While the bulls remain hopeful, new research helps light the path for a possible rally. A new report released from Crypto.com estimates that the users of cryptocurrency across the world might hit the milestone figure of one billion users before the year is over. The report looks at the month-on-month growth of cryptocurrency users, highlighting the increase of new investors and traders entering the scene.

According to the research, the combination of a massive wave of attention towards the cryptocurrency market from retailers, new institutional investment, and countries adopting Bitcoin has led to a flurry of growth in the market. With El Salvador driving the charge, Bitcoin adoption from government regulation across the world is at an all-time high in terms of interest.

Governments are being put under pressure from citizens and investors in the public to regulate or legalise cryptocurrency and crypto-friendly countries are setting a precedent for adoption in the market. El Salvadors adoption of Bitcoin as a legal tender is looking to be a major catalyst for other countries readjusting and reconsidering their crypto laws. Just recently, the Prime Minister of Jamaica announced that the nation was investigating Bitcoins role and how it could be adopted as legal tender in the nation, following the blueprints of El Salvador.

A Legendary Investor Just Predicted The End Of The Us Dollarand Warned Over The Future Of Bitcoin Amid Extreme Crypto Price Swings

Now, the co-founder of the Quantum Fund and Soros Fund Management, Jim Rogers, has warned “what is happening with the U.S. dollar now is the end of the U.S. dollar”but cautioning governments likely won’t allow bitcoin to be used as an alternative.

Want to stay ahead of the bear market and understand what Fed interest rate hikes mean for crypto? A daily newsletter for crypto investors and the crypto-curious

Jim Rogers, a legendary investor, warned Washington “changing the rules” will mean the end of the … U.S. dollarbut also fears the government will crack down on bitcoin and crypto.

getty

“An international currency is supposed to be neutral but in Washington, they are now changing the rules,” Rogers told India’s Economic Times in a wide-ranging interview. “Now if Washington does not like you, they put sanctions on you and you cannot use U.S. dollars.”

Rogers expects countries to start “look for a competitor” to the dollar, naming China, Russia, India, Iran, Brazil as all interested in reducing their dollar reliance.

“The U.S. is the largest debtor nation in the world so, for fundamental reasons and political reasons, people are looking for competing currency,” Rogers said, adding he doesn’t know what that will be yet but hopes he’s “smart enough to buy it when you find it.”

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Is 1 Billion Users By The End Of 2022 Too Ambitious

Last week, YouTuber Lark Davies tweeted a chart showing internet vs. crypto adoption rates. The chart, when superimposed, taking account of different timelines , shows a high degree of symmetry.

Based on what is known about internet adoption, analysts predict global crypto users will hit 1 billion within the next five years. Based on an estimated 200 million current users, this represents an approximate 5x increase by 2026.

As such, to hit 1 billion users by the end of next year is a spirited call. Based on the above chart, the end of 2022 should see around 400-500 million users.

Nonetheless, in justifying its position, the exchange says 2022 will see an overall friendlier stance towards cryptocurrency in turn, driving adoption skywards.

This is because they expect developed nations to finally get their act together with explicit legal and tax cryptocurrency frameworks. They also see rising inflation as a tailwind for digital asset adoption.

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