Cryptocurrency had a big year in 2021, with Bitcoin values skyrocketing (and then plummeting), Coinbase going public and Dogecoin rising in popularity thanks to public support from Elon Musk and Mark Cuban. But 2022 may be an even bigger year for crypto, predicts Jennifer Schonberger, senior reporter at Yahoo Finance and a cryptocurrency expert.
Here, Schonberger shares her predictions for cryptocurrency’s 2022 boom exclusively with GOBankingRates.
Crypto Will Become Bigger and More Mainstream
“According to a study by PYMNTS and BitPay, about 60% of the population is demonstrating interest in making cryptocurrency purchases in the future,” Schonberger said. “The cryptocurrency market is currently worth over $2 trillion and has grown exponentially over the past few years. While that may seem small in the overall global financial market, crypto is continuing to grow at a rapid rate and taking on part of the payment system that’s expected to continue far past 2022.”
Crypto has made major strides in recent years and is set to continue on its growth trajectory going into 2022.
“For reference, in October, the first bitcoin-linked, exchange-traded fund launched, offering exposure to the most widely traded cryptocurrency for any investor with a brokerage account,” Schonberger said. “Crypto is also being used to purchase real estate and pay real estate agents in commission, underscoring how it’s becoming a part of our payment system and that crypto will be part of the future for consumers.”
Schonberger believes that cryptocurrency has the potential to become as mainstream as the internet.
“Crypto will gradually be integrated into our lives similar to the way the Internet has,” she said. “We went from dial-up to broadband with the internet. With crypto, we’re in the dial-up phase, and once we get to broadband, people will be more familiar with it and we will see more daily applications in our everyday lives.”
Some of the reasons crypto will become more mainstream are that it is likely to become more regulated and less volatile in the near future.
“Right now, crypto is still new and largely unregulated, but that’s changing,” Schonberger said. “Congress is looking to adopt a new regulatory framework as the industry looks to offer more options for applying the technology. We’re going to see crypto used more for payments, and people are going to be able to use their credit cards to pay in crypto, making it more mainstream. As demand strengthens, that will likely ease the volatility in the actual currencies.”
Crypto Will Especially Be Embraced by Gen Z and Women
“Gen Z as a whole has more access to technology than previous generations, which could play a big part in the appeal of crypto,” Schonberger said. “They’re more aware and exposed to these topics. Also with the rise of TikTok, social media has ignited greater interest in overall financial literacy. We’ve actually seen a huge spike in audiences from all backgrounds coming to Yahoo Finance this year, with significant growth in both female and Gen Z audiences.”
Schonberger said that as these two groups become more interested in investing, it’s natural that they will become more interested in cryptocurrency as an investment vehicle.
“Crypto is appealing because it’s a whole new asset class to invest in besides stocks and bonds that while volatile, can offer the potential for lots of upside,” she said. “At its core, crypto is a new software and backbone of the internet that is changing the way we transact with money and the way business is done. There are endless possibilities for crypto — some applications we can see and some we can’t yet. Crypto also offers new revenue streams for people who do the research and invest properly, and I think Gen Zers and women, in particular, are realizing these opportunities.”
Impulse and Meme Coins Are Here To Stay
It used to be that Bitcoin and Ethereum were the end-all, be-all of crypto, but in 2021, several other coins grew to popularity. For example, Dogecoin started as a joke, but it’s now the 10th-largest cryptocurrency in terms of market capitalization, with a $30 billion valuation. But not all “meme coins” have proved to be a good investment. In November, the Squid Game crypto SQUID completely crashed as it was revealed it was an apparent scam, following a 33,600% surge.
Before investing in any new buzzy cryptocurrency, “it is important to fully understand what you’re investing in and do your research,” Schonberger said. “Too many fall victim to making impulse investments after seeing a 30-second speculative clip on social media or following fast trends. Our guidance at Yahoo Finance is to invest in reputable companies, seek expert and professional advice, and most importantly, do your research first on trading apps to ensure that they are verified and can offer support when you need it.”
Remember that even if a cryptocurrency is reputable, there will always be some risk involved.
“At the end of the day, you need to weigh your risk tolerance,” Schonberger said. “Investing in crypto is very volatile; you need to have a strong stomach for that and a long-term outlook. This is a very new asset class that will take decades to play out. Do not put money to work in crypto that if you lose, it would hurt you financially. That said, the rule of thumb in investing is the bigger the risk, the bigger the potential reward, and that certainly applies to crypto.”
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