Gautam Madhavan of Mad Influence talks about how variety of industries are showing interest in adopting crypto, sharing a few trends on the evolving market of digital currency.
A cryptocurrency is a digital, encrypted, and decentralized medium of exchange. A cryptocurrency's value is managed and maintained by no government authority. Instead, these responsibilities are divided throughout the internet among the users of cryptocurrencies.
Although most individuals invest in cryptocurrencies as they would in other assets such as stocks or precious metals, you may use crypto to buy conventional goods and services. While cryptocurrency is a fresh and interesting financial asset, investing in it can be risky because you must conduct extensive research to properly comprehend how each system operates.
2021
The cryptocurrency sector has had a great year, briefly surpassing $3 trillion in value in November 2021. Bitcoin, the most valuable cryptocurrency, and ether, the second-most valuable, both reached new highs, while altcoins like the meme-inspired dogecoin grew in popularity. Retail and institutional investors have shown interest in blockchain-based applications, such as decentralized finance, or DeFi, fueling the expansion of Web3, which is the decentralized version of the internet based on blockchain technology that powers NFTs and underpins cryptocurrencies. All of this contributed to the rising popularity of cryptocurrency in 2021.
2022
Bitcoin's market share has dropped as the crypto sector has matured, with other digital currencies such as Ethereum now playing a significantly larger role. Analysts expect this trend to continue throughout the next year, as investors seek out tiny pockets of cryptocurrency in the hopes of making large gains.
Global Crypto Adoption
According to a Chainalysis report, global crypto adoption rose over 880 percent from the previous year by the end of Q2 2021. More people are buying crypto for the first time, and there are more options to buy crypto and earn interest on it. In 2022, this trend is likely to continue, particularly as platforms try to make cryptocurrencies and decentralised finance more accessible.
Play-to-earn Games
In the year 2021, blockchain gaming reached its peak. Axie Infinity (AXS) set the bar high by becoming the first to introduce the notion of play-to-earn games. This, paired with improved graphics and gameplay, resulted in a boom in demand for crypto games. People can earn tokens in play-to-earn games that they can then trade for real money on a cryptocurrency market.
Even while metaverses have been gaining traction for a while, Facebook's move to rename it "Meta" brought virtual worlds into the forefront. We can expect cryptocurrencies to be a part of this growth, as they are the most likely means of payment in the metaverse.
Web3
It is the next version of the internet, a decentralized environment in which users are rewarded for giving their time, creating communities, and sending communications. It's related to the gaming and metaverses discussed previously, but it has broader consequences. Existing businesses are already seeking methods to stay relevant, so the large players are unlikely to be fully pushed out. However, as an investor, you should be aware of everything linked to Web 3, as it runs NFTs and underpins cryptocurrencies. It will remain at the forefront in 2022 due to its rising concept.
Regulations
For all of this year, the spectre of increased crypto regulation has remained over the crypto industry. Governments can no longer ignore cryptocurrencies, as shown by China's steps to outright outlaw cryptocurrency and El Salvador's recognition of Bitcoin as a legal currency.
In already unpredictable markets, regulatory news can have an impact on the price of cryptocurrencies. Because of market volatility, investing professionals advise keeping cryptocurrency investments to less than 5% of your whole portfolio and never investing money you can't afford to lose. In the end, many experts agree that regulation is beneficial to the sector.
In 2021, mainstream companies from a variety of industries expressed interest in cryptocurrencies and blockchain, and some even made investments. This year we will also see an increase in the number of non-crypto influencers becoming crypto influencers as they become more involved in crypto themselves. Some analysts believe that in the second half of this year, larger, worldwide organizations will accelerate adoption even further. While most individuals don't see the value in paying for products with cryptocurrency right now, more merchants accepting payments could change the scene in the future. It will likely be a long time before spending Bitcoin on products or services is a wise financial decision, but more institutional acceptance could open up more use-cases for common people, affecting crypto pricing.
This article piece is authored by Gautam Madhavan, CEO, Mad Influence.
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