If you’ve been paying attention to the first half of 2022 regarding cryptocurrency, you’ll naturally be wondering where it’s all heading. Bitcoin and Ethereum are down over 50% from their peaks near the end of 2021, and the crypto market has stalled now in the middle of the year. There is open talk and speculation about regulations being imposed on the market, with a little actual picture of what that would look like.
The good news is that people are talking about it—and that’s far, far better than not being talked about. So long as people like Elon Musk are keeping the discussion alive, crypto isn’t going anywhere. The industry is still deciding what it wants to be, and the second half of the year—for good or ill—will likely be an interesting one.
Will Crypto Be Regulated?
Regulation would not be the stake in the heart of crypto. It came to life without regulation, but any regulation imposed on it would only go so far as to make crypto safer for investors and protect us all against cybercrime. With regulation, the Terra Luna crash could possibly have been avoided—or at the very least mitigated. Terra Luna’s fall sent shockwaves that affected the entire industry, affecting prices and jobs and the public’s perception of the market as a whole. More regulation would mean increased stability in an exceptionally volatile market. Announcements of regulation would be welcome to many. At the moment, every serious investor says not to invest more in cryptocurrency than you are willing to lose—certainly no more than 5% of your total portfolio—and that’s going to stifle the appetite of even the boldest investor.
Crypto Acceptance Is Broadening
Mainstream, non-tech companies are becoming more comfortable with crypto. Last year AMC announced it would accept Bitcoin payments. Tesla currently accepts Dogecoin payments and holds billions in crypto assets. PayPal has dipped its toe into letting clients hold crypto in their accounts, and experts say that it’ll only take one big player, such as Amazon, to make it financial suicide to not accept crypto as payment.
Governments are starting to take notice. President Biden recently signed an executive order calling government agencies to study “responsible development” of digital assets, including stablecoins. The UK has announced that it plans to be a home to the cryptocurrency industry, but no manifest steps have been made towards that goal.
Universal acceptance of crypto is still a long way off, but the groundwork is being laid, and people are getting comfortable with the idea that this is a real thing, not just fodder for their newsfeed.
DeFi
DeFi stands for Decentralized Finance and refers to an online world of alternative financial services powered by cryptocurrencies and blockchain technology, where software takes the place of intermediaries like banks. Because of this, there’s no central authority to report to in the DeFi space, and it all feels like the early days of the Internet, a future where anything is possible. One benefit is that users are afforded full control over your assets—but there is almost nothing in place to stop you from losing your investments.
Bitcoin, Ethereum, and Dogecoin
Bitcoin is the largest cryptocurrency and a good indicator of the health of the market in general. Bitcoin set a record high in November at $68,000 but fell from that heady height this year, losing more than two-thirds of its value. After showing its potential, most say it’s just a matter of time before it climbs to $100,000, but the question is, when?
Ethereum is the second largest cryptocurrency and arguably the most well-known altcoin. Ethereum could top $4,000 in 2022, or even as high as $12,000. If Ethereum is to establish itself, this is its year, and all signs are favorable.
Dogecoin is clearly on Elon Musk’s radar since Tesla now accepts payments in the cryptocurrency. You can track Dogecoin on okx.com. But if you’re playing the long game, then don’t worry about the day-to-day ups and downs and get sucked into the emotion of the game. Stay the course and keep your head screwed on.
What’s Next?
Speculation and commentary on cryptocurrency may never end, and that’s what makes it so exciting. Clearly, it will not go away, and neither will it be snuffed out. The way things are going, it’s not a question of “if”, but only “when” for crypto. But many more fortunes will be lost than made before this is over. Hence, it’s wise to only invest what you’re prepared to lose, diversify the rest of your investments and never tie financial goals such as retirement or debt payment to the crypto market.
