As the world struggles to stay afloat amidst a global pandemic lasting more than two years, technology companies and financial institutions are planning for something much larger than anyone virus: Decentralized Finance. Or as some would see it, the unstoppable evolution of the way human beings exchange items of value between one another. Gone are the days when businesses and individuals alike chose to trust banks and their intermediaries with all of their assets.
Blockchain technology and DeFi (or Decentralized finance) are revolutionizing the way we think about how our wealth should flow and who should handle it. For thousands of years, humanity has trusted bankers and finance professionals to tend to our economic needs. But as banking institutions become more and more enthralled in scandal and mishandling of funds—the public has turned to their own solution and it is actively changing the facade of banking around the world.
Now individuals have the power to choose where their funds go, to whom they go, and who gets to handle all of the transactions. From newborn fin-tech companies to Silicon Valley heavyweights, just about everyone is jumping into the boxing match and in this article, we explore just who will be the grand champions in this crypto-mania. As well as who to look out for this 2022 and in the years to come.
Nations Joining The Bitcoin Club
As governments and international banking organizations seek to curtail the unregulated use of cryptocurrencies, more and more sovereign nations are dipping their toes into the blockchain and assessing whether their constituents will be a good fit for the groundbreaking technology.
Countries like El Salvador, Panama, Paraguay, and Guatemala are the latest countries seeking to adopt Bitcoin and other stable coins as legal tender. CEO of DeVere, Nigel Green went on to say this about the oncoming admittance to the “Bitcoin Countries List”,
“By adopting a cryptocurrency as legal tender these nations have a currency that doesn’t depend on market conditions within their economy, or from another country’s economy,” the CEO said. “Indeed, as it operates globally, bitcoin is impacted by broader, global economic changes.
Crypto Government Oversight
With cryptocurrency market caps increasingly becoming larger and larger, some well into the trillion-dollar mark—federal regulators are seeking a way to regulate both stable coins and the lesser-known, “altcoins”. As of the moment, in the United States, cryptocurrencies are actively being monitored and lightly regulated by the following: SEC for investments, the CTFC for any crimes involving interstate commerce, and the IRS for income and capital gains taxes.
As of the moment, the SEC also allows for futures ETF (exchange-traded funds) and is currently on the track to allow physically-backed ETFs or ETPs where in Europe they are currently allowed and are being successfully regulated.
The holy grail of cryptocurrency regulations however will hopefully come in the form of a spot-bitcoin ETF later this year, where investment fund providers who view the spot ETF as an entry point for millions of individual investors who seek a reliable entry point into the crypto market and trading circles.
Looking Onward & Forward
The greatest winners of the crypto-mania are still to be determined but we have a pretty keen idea on who some of the biggest winners of 2022 might be. According to Kenneth Rapoza, Forbes Senior Contributor and crypto specialist, we will see more and more DAO (decentralized autonomous organizations) spring into existence, as well as a robust gaming industry and metaverse.
Kenneth goes on to say this, “DeFi will continue to lead in terms of total value in the ecosystem, but blockchain gaming will introduce more people to crypto because the learning and adoption curves in gaming are notably smaller than that of DeFi.”
Investing in a Meme Culture
Another field of interest that Kenneth mentions are the multitude of metaverse projects like Decentraland and meme coins that are garnering a lot of attention like the now infamous, Dodgecoin or Shiba Inu coin. Backed not by conventional means of banking or technology, rather driven by a large and engaged community drive the price of these meme coins, started as a joke, and slowly evolved into a multi-million dollar project.
With that being said, there are a few red flags to look out for this 2022—namely unsupported altcoins with little or no technological backing. When examining a project, make sure to do your homework and due diligence. Analyze the market projections, the size of the community, market cap, and all other financial-related information as well as business information on the development team. These are all factors to keep in mind, before, investing in a project or coin.
And with those in mind, surely, you will know whether to invest or not in the next Japanese dog-themed crypto project. And remember as the great Tupac Shakur once extolled, “don’t believe in the hype”.