The Future of Cryptocurrency

The Future of Cryptocurrency: Experts Predict the Future After a ‘Breakthrough’ 2021
2021 was a very big year for cryptocurrency, but what’s expected of 2022 and beyond. Let’s find out.
Bitcoin hit an all-time high in 2021 but then also dropped considerably. There were also more buy-
ins from major companies. Ethereum, the second-biggest cryptocurrency, reached a new high in the
last few weeks of 2021. Thanks to Joe Biden’s administration, new cryptocurrency regulations are
also coming in the US.
People’s interest in cryptocurrencies has also increased. It’s become a hot topic among investors and
has even attracted the attention of popular culture. Everyone from Elon Musk, the CEO of Tesla, to
the kid on Facebook is talking about it.
The Breakthrough Year
Dave Abner, head of global development at Gemini, a popular cryptocurrency exchange, said 2021
was a breakthrough year for cryptocurrencies. Abner stated, “There’s tremendous focus and
attention being paid to [the crypto industry].”
The industry is still in its infancy and constantly evolving. This is probably why big drops quickly
follow new highs. It’s still difficult to predict the long-term performance of cryptocurrency. Still,
according to the experts, more regulation and institutional adoption of crypto payments will
probably impact the future.
Predicting the Future
Here are the opinions of five crypto experts regarding what will happen in the crypto space in the
future:
Cryptocurrency Regulation
One can expect more conversations about cryptocurrency regulation. US Officials have shown a lot
of interest in stablecoin regulation. Lawmakers in Washington DC and worldwide strive to establish
laws and guidelines that make crypto safer for investors while simultaneously being less appealing to
cybercriminals.
Jeffrey Wang, head of the Americas at Amber Group, a Canada-based crypto finance firm, stated,
“Regulation is probably one of the biggest overhangs in the crypto industry globally. We would very
much welcome clear regulation.”
Jerome Powell, Federal Reserve Chair, said he has “no intention” of banning cryptocurrency like
Ethereum in the US.
Similarly, Security and Exchange Commission Chairman Gary Gensler has often talked about his
agency’s and the Commodity Futures Trading Commission’s role in policing the crypto industry. He
even said that investors are “likely to get hurt” if stricter regulation is not introduced.
Also, the IRS is interested in ensuring investors know how to report virtual currencies when filing
their taxes.
Powell and Gensler’s views are consistent with the views of the Biden administration and key US
lawmakers, as they all believe that there is a need for more cryptocurrency regulation.
Regulation in crypto will come with hurdles. Wang says, “There are different agencies that may or
may not have jurisdiction to oversee everything. And it differs state by state.”

When there is clear regulation, it will lead to the removal of a “significant roadblock for
cryptocurrency,” says Wang, since US firms and investors are operating without clear guidelines
presently.

How Investors Will Be Impacted?
The President signed a $1.2 trillion bipartisan infrastructure bill with crypto tax reporting provisions
that would make it easier for IRS to track crypto activity among Americans. So, investors must keep
records of capital gains or losses incurred on the crypto assets. The new rules made it easier to
report crypto transactions properly. So, investors seemed happy with it.
Shehan Chandrasekera, CPA, head of the tax strategy at CoinTracker.io, a crypto tax software
company, says, “Exchanges will have to issue 1099-B tax forms with cost basis information to
investors. This will significantly reduce the crypto tax filing burden.”
Regulatory announcements like this can also impact cryptocurrency prices. Experts recommend not
investing more than 5% of the total investments in crypto and ensure you never invest anything you
aren’t okay with losing.
Many experts think that regulation would be good for the crypto industry. Ben Weiss, CEO, and co-
founder of CoinFlip, a cryptocurrency buying platform, and crypto ATM network, said, “Sensible
regulation is a win for everyone. It gives people more confidence in crypto, but I think it’s something
we have to take our time on, and we have to get it right.”

ETF Approval of Crypto
The first Bitcoin ETF has already made its debut on the New York Stock Exchange. Developments like
this represent a new, more convenient way to invest in crypto. Investors can buy in on
cryptocurrency directly from traditional investment brokerages thanks to The BITO Bitcoin ETF. It
negates the need to find new brokerages.
At the Aspen Security Forum, Gensler said, “We do it in the equity market, we do it in the bond
markets, people might want it here.”
Some believe that BITO ETF isn’t enough because though the fund is linked to Bitcoin, it doesn’t hold
the crypto directly. Instead, it holds Bitcoin futures contracts.
Though Bitcoin’s future usually follows the trends of the actual crypto, experts believe that it might
not track the price of Bitcoin directly.

How Investors are Impacted by ETF Approval of Crypto
BITO saw a lot of trading activity in the first few weeks. Generally, if the crypto assets are easy to
buy, like BITO, more Americans will buy and influence the crypt market. Any brokerage that offers a
retirement or any other traditional investment account can allow you to buy BITO.
You should know that investing in a crypto ETF has the same risk as any other crypto investment. So,
it is volatile, and you should invest any money you can’t afford to lose.

Broad Institutional Cryptocurrency Adoption
In 2021 and 2022, many mainstream companies have started to invest in or showed an interest in
crypto investments. For instance, AMC has announced that it will accept crypto payments soon.

Even PayPal and Square are allowing users to buy on their platforms. Even Tesla might accept it in
the future as it already holds billions in crypto assets. Experts predict more and more of this buy-in.
Abner said, “We’ve seen a tremendous amount of inflow of attention, and that’s going to continue
to drive the growth of the industry for a while now.”
Some experts predict that this crypto adoption by large organizations could boost crypto in the
future. Weiss said, “What we’re looking at is institutions getting involved in crypto, whether it’s
Amazon or the big banks.” He also added that a giant retailer like Amazon could “create a chain
reaction of others accepting it” and “add a lot of credibilities.”
Amazon and Walmart are recruiting experts to oversee blockchain strategies and action plans. So,
they are pretty serious about it.

How Institutional Adoption Will Impact Investors
Though paying for things and luxuries isn’t the norm at the moment, it might be the future when
more and more retailers accept payments in the form of crypto. It will likely impact the
cryptocurrency prices, and it might become more expensive as it has more real-world uses.
Bitcoin’s Future Outlook
Bitcoin price had a wild ride in the last few months. From reaching new highs to plunging deeply very
quickly, things have changed quickly. So, it is difficult to say how high or how low it will go in the
future.
How Bitcoin’s Future Will Impact the Investors
Investors should focus on playing a steady or long game and only invest what they can lose. They
should also not worry much about short-term swings. The best policy to follow would be to set it and
forget it.
If you worry too much about short-term swings or check the prices daily, you might react
emotionally and act rashly. You might make bad decisions that lead to losses.
The Future of Cryptocurrency
Predicting the future of cryptocurrency is hard as there is not much history available on which one
can base the predictions. So, investors should only invest what they can lose or less than 5% of their
investment portfolio in cryptocurrency. It is wise to stick to more conventional investments like
precious metals purchases for long-term wealth building.
In the words of Frederick Standfield, a CFP with Lifewater Wealth Management in Atlanta, Georgia,
“If you were to wake one morning to find that crypto has been banned by the developed nations and
it became worthless, would you be OK?”
It is also recommended that you never put crypto investments above other financial goals like paying
off high-interest debt, saving for your child’s education, and saving for retirement.
Crypto Vs. Gold
There was a time when crypto was considered to be digital gold. That’s not the case after all. The
Bitcoin prices have come down by over 15% in 2022. Even other top cryptocurrencies like Solana,
Ethereum, and dogecoin have fallen sharply this year.

In contrast, tactual gold has increased by over 4% and is back to around $1,900 an ounce. It might
reach record highs of above $2,000. Savvy investors know that when the Federal Reserve is
increasing interest rates, gold and other precious metals like silver, platinum, palladium, and even
copper are better hedges against inflation.
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References:
https://time.com/nextadvisor/investing/cryptocurrency/future-of-cryptocurrency/
https://www.cnn.com/2022/04/27/investing/gold-bitcoin-investing/index.html