Blockchain is on the up and up as mainstream adoption continues. Find out what experts expect for the blockchain outlook in 2022.
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The blockchain market continues to expand as exciting new opportunities gain traction with investors. But what could 2022 bring in terms of actionable potential?
The world of blockchain ventures is vast, ranging from cryptocurrencies to non-fungible tokens (NFTs). The possibilities seem endless on this side of the digital market, and thanks to increasing interest and adoption, 2022 is shaping up to be a landmark year for the space as a whole.
Here the Investing News Network (INN) takes a closer look at the future of blockchain investment in 2022, with perspectives and commentary from experts in this exciting field.
Blockchain outlook 2022: Cryptocurrency price projections remain difficult
Digital coins have taken off significantly, with many investors seeing them as a viable option. What's more, regulators who once dismissed them as a fad are now giving them recognition.
Yet despite this awareness and better understanding, cryptocurrency price projections are still tricky, which can lead to major gaps between expectations and reality in the market.
“We could see lots of price movements, even sideways markets or down markets — who knows,” Som Seif, founder and CEO of Purpose Investments, previously told INN.
Watch the full interview with Seif above.
Seif's investment firm has joined the wave of cryptocurrency funds in Canada, becoming one of many to start offering cryptocurrency-related exchange-traded funds (ETFs). In 2021, Purpose Investments launched several cryptocurrency funds as Canadian ETF makers jumped on this new possibility.
While volatility is the norm for digital coins, Fred Brothers, president and co-founder of Cion Digital, told INN he expects the number of general consumers who own cryptocurrencies to rise in 2022.
Justin Hartzman, CEO and co-founder of CoinSmart Financial (NEO:SMRT,FSE:IIR), said cryptocurrency price projection is tricky because of the volatility in the space.
“Volatility goes hand in hand with this market, so there will undoubtedly be some periods of heavy sell-side pressure, but the market’s performance in the last two years has placed crypto firmly in mainstream discourse, and has further legitimized the industry as an integral part of the modern investor’s portfolio,” Hartzman said.
Blockchain outlook 2022: Is bitcoin in a bear market?
2021 was a critical period for bitcoin, but the world's most popular cryptocurrency has found itself at a bit of a crossroads as increased scrutiny affects its long-term outlook.
“Goldilocks conditions are ending and the liquidity tide is receding which will disproportionately harm overvalued asset classes and speculative areas of the market including cryptocurrencies,” Todd Lowenstein, chief equity strategist at Union Bank’s private banking arm, told CNBC.
The US Securities and Exchange Commission had its eye on bitcoin throughout 2021. While the regulator allowed the launch of bitcoin ETFs, these funds are only allowed to track bitcoin futures, rather than the coin itself.
The move, experts told INN, still limits the availability of the cryptocurrency.
“The major issue with using futures contracts to provide long-term exposure to a commodity is that once the future date arrives, the fund needs to sell the existing futures contract to buy a new one, with a date further in the future; this is known as 'rolling the futures,’” Michael Scott, investment analyst at Purpose Investments, and Josh Bubar, vice president of product at the firm, wrote in a note to investors.
But in the future ETFs in the US may be able to offer direct exposure to the price of the coin, according to Vijay Ayyar, vice president of corporate development and global expansion at crypto exchange Luno.
“Increasing pressure/evidence ... points to a Bitcoin Spot ETF being approved in 2022 mainly because the market is now large and mature enough to support one,” he told CNBC.
Alex Lemberg, CEO of Nimbus Platform, told INN he thinks bitcoin is in a bear market right now. However, that will not impact some of the effects that the rise of bitcoin has had on other blockchain-related opportunities and trends, such as decentralized finance — also known as DeFi — which his firm is deeply invested in.
“DeFi is also loved by both professional bankers and traditional financial customers who view it as their window into the world of crypto,” Lemberg said.
Blockchain outlook 2022: Blockchain opportunities gaining acceptance
Blockchain business solutions abound, but their adoption rate by established companies has long been a barrier discussed by blockchain enthusiasts.
The future may be bright for the market, though, as experts foresee increased adoption and an overall better understanding of the opportunities surrounding blockchain technology.
“Over the next two to three years you’re going to see this explosion in businesses, Fortune 500 companies, consumer packaged goods companies — all these guys are starting to adopt cryptocurrency for various reasons,” Pat White, co-founder and CEO of Bitwave, previously told INN.
Brothers noted he fully expects to see more opportunities for cryptocurrency acceptance in the world.
“We want companies to understand the value of blockchain technology and that this is the natural evolution of digital payments, and their customers are driving the shift,” Brothers said.
Blockchain outlook 2022: Investor takeaway
While the blockchain market has proven tricky to pin down in terms of projections, it’s clear 2022 may offer some monumental developments for the uses of blockchain technology.
On top of this, cryptocurrencies and NFTs may attract the attention of the masses and make market participants more comfortable with the industry and digital solutions as a whole.
“There may be some bumps along the way, but the crypto market tends to reward investors who hold with conviction, and we expect this trend to continue in the future as the digital economy’s user base grows and new use cases continue to be built,” Hartzman told INN.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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