If you look at the trend of cryptocurrency in the last year 2021, it was a big year for the crypto market. It was in November when Bitcoin has recorded its all-time high and it was almost $70,000. It was a number that no one expected. Many Bitcoin investors have earned huge profits during this time.
Along with that, El Salvador has recognized Bitcoin as legal tender and it is the first country to do so. Elon Musk is another reason why the popularity of cryptocurrency increased. Following this trend, it is anticipated that 2022 is going to be a great year for cryptocurrency lovers and investors. There are many factors that are shaping the future of the institutional crypto market. But trading volume, altcoins, tools, security solutions, and regulated Defi play an important role in shaping it.
The Trading Volume
In the year, 2022, the adoption of retail and institutional cryptocurrency is expected to grow, especially in crypto trading. Robinhood, the mobile trading platform has made it very easy to trade, buy and sell cryptocurrencies. Also, there are many public companies such as Telsa, MicroStrategy, Square, and Galaxy that started buying Bitcoin and added it to their balance sheets. The market cap of Bitcoin is high compared to thousands of other cryptocurrencies in the crypto market at present. Earlier, there was no proper infrastructure for selling, buying, or trading with cryptocurrency. But now things have changed and hence people started trading and buying more cryptocurrency.
Still, there is a lot of need for the perfect tools and services for institutions. Many start-up companies are competing to provide several support services like security and management, asset storage, mining software, hardware, and also payment infrastructure. There are several companies that have even raised funds for these tools.
Altcoins Get More Popular
In the coming year, Altcoins are going to get more popular. For example, Ethereum is one of the popular Altcoins. But it has a high gas fee and scalability issue, it is challenged by the other Altcoins like Cardano, Solana, Avalanche, and a few others. So, investors will have a good scope of making profits with these Altcoins. There are so many Altcoins available at present and they have a good scope of becoming popular. But you should also know that they are equally volatile like Bitcoin. There are many altcoins that have a very low price but you will be able to make good profits from them. More and more people will start investing in Altcoins and the volume will start shifting from Bitcoin to Altcoins. To know what countries are trying to create their own digital currency visit here .
Cryptocurrency is only present in the digital form and anything that is present online can be easily hacked. Online hacking or cyber theft has always been part of cryptocurrency. There were so many cases reported about the hacks. In 2014, Mt. Gox, a Bitcoin exchange has filed that it lost millions of dollars after hackers stole them. In 2018, a similar incident was reported again. Another cryptocurrency exchange, Coincheck also lost millions of dollars.
In 2021, Poly Network, a Defi platform also lost $600 million when hacks stole them. MonoX Finance is also a DeFi platform, and they also recently lost $31 million. But now the security measures are increasing. These cryptocurrency exchanges are partnering with some secured custodians for managing risks.
DeFi or Decentralized Finances that are working on Blockchain technology are going to have a great year in 2022. The counterparties for DeFi transactions are not known and so they mostly remained on the sidelines only. The growth of this DeFi is going to accelerate this year. During this growth, the lack of counterparty checks and regulatory clarity problems will be addressed. More regulated clarity will help people to adopt cryptocurrency.
There will be many turns and twists in the crypto business. One thing is guaranteed to happen and that is the growth of the crypto market in 2022. So, there are the main and important factors that drive institutional cryptocurrencies in 2022 and also in the coming years. Cryptocurrency has a great future when you understand and invest in the right way. You will be able to make good profits with the improved cryptocurrency standards.