It was a crazy year for cryptocurrencies. In the past 52 weeks, its price has risen by more than 70%.
The market cap of the cryptocurrencies has doubled a year ago and is now estimated at $2.5 trillion.
A survey in the first half of the year estimated that there were more than 200 million cryptocurrencies holders. Several countries, including the U.S., have issued some form of Bitcoin-based exchange traded funds.
We also saw backlash against cryptocurrencies. China has been one of the most explicit countries in cracking down on cryptocurrencies, banning most transactions for its billion-plus citizens. Similar measures are being considered by India.
Even though governments are not likely to ban it, the year of skepticism about the energy drain and climate impact of the coin has been a year.
What does the new year hold? I am the editor of a newsletter and I see some important trends in the future.
We will see more advances in the adoption of cryptocurrencies. Financial institutions will increasingly embrace cryptocurrencies because customers are demanding that it be part of their portfolio, even though they may not always take the form of legal tender. Many banks and financial service companies will work with the digital currency.
Canada's Purpose Investments launched the world's first bitcoin-based exchange traded fund in February. It has over a billion dollars under management less than a year later.
The Securities and Exchange Commission could approve an exchange traded fund for cryptocurrencies in 2022, even though it has been reluctant to do so.
Individual investors are more likely to realize that they can build profit in a portfolio despite the risks, and borrow against it.
A fascinating competition has developed between the two major players in the space, with the latter presenting themselves as faster and cheaper.
savvy investors are likely to balance their portfolios to play it safe if the argument doesn't resolve in 2022,
Tech giants have retreated in the year since they once dreamed of dominance in the field.
The recent departure of David Marcus, the head of Meta's digital currency, guarantees that even if Diem makes it out of the beginning, it will be irrelevant.
In October, it was announced that the ambitious plans for a full-blown payment and banking service would not be pursued. Existing cryptocurrencies and stable coins should benefit from the departure of tech companies.
The more the world wants it, the more governments want to crack it down.
Governments can make it hard for citizens to trade in cryptocurrencies by denying licenses to exchanges. Climate impact of cryptocurrencies mining will be more scrutinized in the U.S. and Europe.
