The Future of Cryptocurrency: 8 Experts Share Their Predictions

In the first half of 2022, the market for cryptocurrencies went down very quickly.

Bitcoin and Ethereum have both dropped more than 50% since their all-time highs in late 2021.The cryptocurrency market as a whole has essentially stagnated, despite the fact that there have been some minor rises in price during the last several weeks. No one knows for sure, but several experts in the field think that the prices of cryptocurrencies may continue to fall before they start to rise in a meaningful way.

The price of bitcoin reached many new all-time highs in 2021, which was followed by significant price declines. At the same time, more prominent organizations and institutions began to invest in bitcoin. After reaching its own new all-time high around the end of the previous year, Ethereum, the second-largest cryptocurrency, saw a precipitous decline in June that sent it to its lowest level since the beginning of 2021. Officials from the United States government and the administration of former Vice President Joe Biden have shown a growing interest in proposing new rules for cryptocurrencies.

Meanwhile, widespread fascination with cryptocurrencies persists, as shown by the fact that everyone from seasoned investors like Elon Musk to your high school crush on Facebook has something to say about it.

According to Dave Abner, director of global development at Gemini, a renowned cryptocurrency exchange, the year 2021 was a "breakthrough" in many different respects. "[The cryptocurrency business] is now receiving a significant amount of emphasis and attention,"

However, the market is still in its infancy and is subject to continuous development. Because of this, every new high in the price of bitcoin is often quickly followed by significant price declines.

So, what are some of the remaining plans for the year 2022?

It is impossible to make a long-term forecast of where things will go, but in the next few months, industry professionals will be watching factors like legislation and the acceptance of cryptocurrency payments by institutions in an effort to get a deeper understanding of the sector.

Even though it is hard to make accurate forecasts, we polled five industry leaders to find out what they anticipate for the future of cryptocurrency:

Cryptocurrency Regulation

Expect lawmakers in Washington, DC, and around the world to keep talking about how to regulate cryptocurrencies. They want to figure out how to make trading cryptocurrencies safer for investors and less appealing to hackers.

In light of the recent failure of the Terra Luna cryptocurrency, authorities in the United States have shown a particular interest in the regulation of stablecoins. The cryptocurrency markets fell into a freefall in May, which prompted stablecoins known as TerraUSD (UST) to depeg from the dollar. This, in turn, caused the cryptocurrency known as Luna, which was connected to TerraUSD, to also go into a freefall. As a direct consequence, the money many people had invested in Terra and Luna disappeared in a couple of days. Within a few weeks following Terra's collapse, the cryptocurrency market saw another precipitous drop, and other cryptocurrency firms announced layoffs and halted withdrawals as a cost-cutting measure in response to the very volatile market circumstances. Since then, a number of businesses have filed for bankruptcy, including Three Arrows Capital and Celsius.

As a result, the domino effect has recently given the government more evidence to support its efforts to regulate cryptocurrency.

"After the catastrophic events that have unfolded in the cryptocurrency market over the past few weeks, it is clear that stringent regulation could arrive soon," says Marcus Sotiriou, a market analyst at digital asset broker GlobalBlock. "After the catastrophic events that have unfolded in the cryptocurrency market over the last few weeks," it is possible that the failure of DeFi lenders will provide the justification authorities have been looking for to adopt stringent cryptocurrency regulations.

Concerning regulations, 2022 has seen some progress, even though there is still a very long way to go. In March, Vice President Joe Biden put his signature on an executive order requesting various government departments research the "responsible development" of digital assets such as stablecoins. Recently, the United States Treasury Department published the first framework that resulted from President Biden's executive order on digital assets. This framework outlines how the United States should engage with other countries with regard to digital assets, and it was published as a result of President Biden's executive order.

In 2021, the Chairman of the Federal Reserve, Jerome Powell, stated that he had "no intention" of prohibiting cryptocurrency in the United States. Gary Gensler, who is the head of the Securities and Exchange Commission, has talked a lot about how both his agency and the Commodity Futures Trading Commission keep the industry in check.

Gensler has said, on many occasions, that investors are likely to suffer losses if more stringent regulation is not implemented. Additionally, the Internal Revenue Service (IRS) has a clear interest in ensuring that investors know how to disclose virtual currency when they submit their tax returns. Powell and Gensler agree with a growing number of people in the Biden administration and in Congress who think that bitcoin needs more regulation.

In a recent interview, Gensler stated that investor protection around various service providers—including exchanges, lending platforms, and broker-dealers—would be beneficial to the general public. "More broadly, the public right now would benefit from investor protection around these various service providers," Gensler said. Therefore, at the Securities and Exchange Commission, we are working in each of those three categories—exchanges, loans, and broker-dealers—and talking to industry players about how to come into compliance, or alter some of that compliance."

Regulation is fraught with difficulties, much like other aspects of the bitcoin industry. "There are multiple authorities that may or may not have authority to supervise everything," says Jeffrey Wang, president of the Americas at Amber Group, a crypto finance business located in Canada. "There are numerous agencies that may or may not have jurisdiction to oversee everything." Additionally, it varies from state to state.

According to Wang, the elimination of explicit regulation would imply the removal of a "major obstacle for cryptocurrencies." At present, businesses and investors in the United States are functioning without clear restrictions.

What could new regulation mean for investors?

Regulating cryptocurrencies may be a controversial topic, but many people in the industry think it will be good for investors and the industry in the long run.

More regulation may result in increased stability in the notoriously volatile cryptocurrency sector. As long as it strikes the right balance, it also has the potential to protect long-term investors, prevent fraudulent activity within the cryptocurrency ecosystem, and provide clear guidance to allow companies to innovate in the cryptocurrency economy. All of these benefits are contingent on the fact that it strikes the right balance.

According to Ben Weiss, CEO and cofounder of CoinFlip, a platform for purchasing cryptocurrencies and a network of cryptocurrency ATMs, "Sensible regulation is a win for everyone." "It gives people more trust in crypto, but I believe it's something we need to take our time with and we need to get it right." [Cryptocurrency]

In markets that are already very volatile, regulatory statements have the potential to impact the price of cryptocurrencies further. Because the market is so volatile, financial experts say that you shouldn't invest more than 5% of your portfolio in cryptocurrencies and never invest money you don't want to lose.

Broader Institutional Cryptocurrency Adoption

In 2021, conventional businesses operating in a variety of sectors began to show interest in cryptocurrencies and blockchain technology, and in some instances, they even made direct investments in these technologies. For example, AMC made the announcement that it would begin accepting Bitcoin payments one year ago. Businesses in the financial technology sector, such as PayPal and Square, are also placing bets on cryptocurrencies by enabling customers to purchase them on their platforms. Despite holding billions of dollars' worth of cryptocurrency assets, Tesla continues to waver on whether or not it will accept payments in bitcoin or Dogecoin. However, Tesla does accept payments in Dogecoin. The consensus of the experts is that this buy-in will continue to increase.

According to Abner, "We've seen a huge amount of attention flowing in, and that's going to continue to fuel the expansion of the sector for a long time now."

According to the forecasts of several industry analysts who focus on large multinational firms, the second half of this year might see even more widespread use of this technology. According to Weiss, "what we're looking at is institutions becoming engaged in crypto," and by "institutions," he means companies like Amazon and large banks. A major retailer such as Amazon has the potential to "cause a chain reaction of other people embracing it" and would "give a lot of legitimacy" to the proposition.

Indeed, Amazon recently stirred speculation that it is making strides toward that objective by uploading a job offering for a "digital currency and blockchain product lead." These allegations were created when Amazon posted the job listing online.

The implications of increased institutional usage for investors

Even while using cryptocurrency as a payment method doesn't make much sense for most people right now, this might change in the future if more merchants start accepting payments in cryptocurrency. Further institutional acceptance might bring about new use-cases for regular consumers, which would then have an influence on the values of cryptocurrencies, but we are probably still a long way off from it being a wise financial choice to spend bitcoin on products or services. If you want to acquire cryptocurrencies as a long-term store of value, you should know that the more "real world" applications you have, the higher the likelihood that both demand and value will grow. However, nothing can be guaranteed.

The Future of NFTs

NFTs, which are also called "non-fungible tokens," have been around since 2014, but most businesses didn't start using this new technology until 2021.

The concept that non-fungible tokens (NFTs) might represent digital ownership of a broad variety of irreplicable intangible assets has piqued the interest of public figures as well as major corporations such as American Express and Gucci. According to the statistics gathered by DappRadar, an app store for decentralized apps, total sales of NFTs reached $25 billion in 2021, up from $94.9 million the year before.

However, there is ongoing discussion over whether or not NFTs are here to stay or are only a passing trend. According to data from DappRadar, NFT sales fell below $1 billion for the first time in a year during the month of June.

The opinions of industry professionals continue to be divided on the topic, with some calling it a "bubble," while others assert that the technology underpinning NFTs, namely the smart contracts built on blockchain technology, is what provides the true value. At the same time, producers and artists are saying that this is the next way to make money from their work.

According to the personal financial expert at HumphreyTalks, Humphrey Yang, "I do believe that right now they are incredibly popular, particularly over the course of the previous four months."

I believe they will still exist in ten or twenty years. I am not aware of how often we make use of them. People will always find some benefit in participating in communities, but the wider uses of NFTs will be more exciting.

The most recent data suggests that the market may be beginning to level out. According to a recent analysis by Chain lysis, about one million accounts were actively buying or trading NFTs at the beginning of the year. However, that number has since dropped to around 491,000. The falling value of cryptocurrencies, together with other macroeconomic variables like inflation, increasing interest rates, and Russia's conflict in Ukraine, is expected to continue to be detrimental to the performance of the NFT market, according to the forecasts of certain industry specialists.

According to what was said in the research by Chain lysis, "NFTs witnessed tremendous growth in 2021, but this growth hasn't been continuous, and it seems to have leveled out so far in 2022."

What the decline in NFTs mean for investors?

During the course of the previous year, a great number of individuals purchased NFTs with the intention of turning them into investments or just because they find that doing so is enjoyable. The recent drop in value of many of these digital assets may be due to the drop in value of the cryptocurrency market over the last few months.

According to Yang, purchasing an NFT is "even riskier" than purchasing cryptocurrency since it is "almost like a leveraged bet on crypto," which makes it riskier from an investment standpoint. "It's basically gambling, but people don't really know the difference, and they purchase them because they're enjoyable," he adds. "But people buy them nonetheless because they're fun."

Given that NFTs involve even greater levels of risk and speculation than cryptocurrencies, it is highly recommended that you steer clear of investing in them, and this is particularly true today, when crypto values are generally falling. Experts believe that the majority of long-term investors would be better served in the long run by devoting just a tiny percentage of their portfolio (less than 5%, and never at the price of reaching other financial objectives) to bitcoin or Ethereum, two of the biggest cryptocurrencies, rather than to an NFT. These allocations should never be made at the expense of fulfilling other financial goals.

Future of DeFi

If you have funds invested in cryptocurrency, you have most likely been familiar with the phrase "DeFi." It is an online world of alternative financial services that are driven by cryptocurrencies and the technology behind blockchains. The term "decentralized finance" refers to this online world.

"Smart contracts" are used by DeFi in order to take the place of conventional middlemen such as banks and lenders. To a large extent, the financial institutions we engage with daily to handle our money will be supplanted by software. Because of this, there is no central authority in the DeFi domain that people can report to.

However, DeFi is still in its early stages of development, much like the early stages of the internet, which were characterized by "Wild West" characteristics such as simple chat rooms, primitive websites, and early online service providers. In light of this, its growth is predicted to have some hiccups and speedbumps along the road, but eventually, experts believe that the decentralized file storage market will be home to companies comparable to Amazon and Google.

According to Dr. Merav Ozair, a blockchain specialist and a professor of fintech at Rutgers Business School, the next significant step for DeFi is the continuation of the process of refining. "The next stage is finding out how to produce excellent code and taking everything a notch higher," he adds. "The next step is figuring out how to make good code."

What broader DeFi adoption mean for investors?

DeFi is the place to go if you're looking for complete and utter control of your financial holdings.

However, this may come at a cost since there are fewer regulatory guardrails to keep your assets secure. This may reduce the level of protection they provide. If you lose your funds to hackers or by any other means, there is a possibility that there is no way to get them back. DeFi may be compared to the "wild west" of banking and investment in many different ways.

It is still early in the development of decentralized finance, so if you are going to make a comparison between traditional financial products and decentralized financial products, it is prudent to weigh the risks against the potential rewards. Because the decentralized finance market is not regulated, you will expose your finances to greater risk there. However, you will also have more freedom and control. To get access, you will first need to purchase cryptocurrency, and to get started, you will need to have a solid foundational understanding of cryptocurrency.

Financial advisors advise you to invest no more than 5% of your total portfolio in cryptocurrencies, and to do so only after you have established a contingency fund and paid off any high-interest debt you may have.

Bitcoin’s Future Outlook

As the largest cryptocurrency by market cap, Bitcoin is an excellent predictor of the crypto market in general. The rest of the market tends to follow Bitcoin's patterns because Bitcoin is the leader in the cryptocurrency market.

The price of bitcoin had a roller coaster journey in 2021, and in November of that year it reached a new all-time high price by going over $68,000. However, it all came tumbling down in the year 2022.

This year has been marked by continuing macroeconomic uncertainty, which has mostly been driven by escalating inflation, a volatile stock market, increasing interest rates, and worries of a recession. This uncertainty has contributed to Bitcoin's and the larger crypto market's downward trend. Since November of last year, the value of one bitcoin has decreased by more than two-thirds, reaching a low of $17,500 in the most recent weeks of trading. There is still disagreement among financial experts as to whether or not bitcoin has reached its lowest point yet. Some believe it has already reached that level, while others believe it could fall as low as $10,000 by 2022.

Because of this volatility, financial experts recommend that beginners limit their cryptocurrency holdings to no more than 5% of their overall portfolio.

But how much further can bitcoin go before it reaches its ceiling? Even though bitcoin has had a rough start to the year, financial analysts continue to predict that its price will reach $100,000; they think it's more of a question of when than if this will happen. According to Kiana Danial, author of "Cryptocurrency Investing for Dummies," the history of Bitcoin may hint at what to anticipate in the years to come about the cryptocurrency.

Since 2011, according to Danial, the bitcoin price has seen significant price increases followed by significant price decreases. "What I anticipate from Bitcoin in the near term is volatility, but in the long run, I anticipate growth."

Ethereum’s Future Outlook

Ethereum is the second most valuable cryptocurrency and the most well-known alternative coin currently available on the market. Along with bitcoin, it has the potential to be a useful measurement of the cryptocurrency industry. Its value has increased considerably over the course of the last six years, going from $0.311 at the time of its introduction in 2015 to about $4,800 at its maximum point towards the end of last year.

The price of Ethereum could go through the roof in 2022, even though it is still a long way from its all-time high.

The success of Ethereum's big upgrade, which is scheduled to take place on September 19, is said to be a factor that might determine that amount. The technology behind Ethereum is undergoing a shift to a version that uses less energy and is referred to informally by industry insiders as "The Merge." The improvements will also make the network more cost-effective, in addition to making it quicker and more efficient.

According to industry analysts, the price of ether may surpass $4,000 once again in 2022 and may even go as high as $12,000 if Ethereum is able to deliver on the promises it made with the merger. Investors are keeping a close eye on every development leading up to the merger and, in some instances, are taking advantage of the present slump in the market by purchasing on the dip in anticipation of the merger. Several experts in the field say that it is impossible to tell if the price of Ethereum will keep going up or go back down to levels lower than before.

"This is going to be a really significant year for Ethereum, a sort of make-or-break year," said the developer of the Ethereum blockchain project.

Henri Arslanian, the worldwide head of crypto for the professional services company PwC, made this statement.

What does the price volatility of bitcoin and Ethereum mean for investors?

The volatility of Bitcoin and Ethereum is yet another reason for investors to maintain a steady and long-term strategy. Do not be concerned about price fluctuations in the short term if you are purchasing an asset for its potential for long-term growth. The greatest thing you can do with your bitcoin investment is to not look at it at all, sometimes known as "set it and forget it." Financial experts keep reminding us that an emotional response can cause investors to act hastily and make decisions that hurt their investments. This can happen when prices go up or down, but it can also happen when prices stay the same.

The Future of Cryptocurrency

We can speculate on what value bitcoin will have for investors in the coming months and years (and many will), but the truth is that it is still a new and speculative investment with little history on which to base our predictions. No one really knows anything, regardless of what any given expert may believe or assert. Because of this, it is imperative that you only invest money that you are willing to lose, and if you want to grow wealth over the long term, you should stick to more traditional assets.

"If you were to wake up one morning to discover that developed countries had outlawed crypto and that it had become worthless, would you be okay?" Next Advisor talked to Frederick Stanield, a certified financial planner who works for Atlanta, Georgia-based Lifewater Wealth Management.

Keep your investments modest, and under no circumstances should you prioritize cryptocurrency trading above other important financial objectives, such as putting money away for retirement or paying off debt with a high-interest rate.

That's all for today, see ya tomorrow! If you want more, be sure to follow our Twitter (@croxroadnews)

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

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