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Discussing The Macroeconomic Trends Impacting Bitcoin In 2021 And 2022
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Tag: 2022
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Bitcoin Mining At Home: Trend To Watch In 2022
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Our Crypto Predictions for 2022
Key Takeaways
- 2021 was an historic year for the cryptocurrency industry.
- While growth in the Metaverse, DAOs, and NFTs looks likely for the year ahead, regulatory intervention is a major concern for the industry.
- After interest in Layer 1 exploded in 2021, Layer 0 and Layer 2 could follow suit in 2022.
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Regulatory intervention, Ethereum’s merge to Proof-of-Stake, the growth of DAOs, and—yes—the Metaverse look set to be major crypto trends for the year ahead.
Reflections on 2021 in Crypto and the Path Ahead
2021. Who could have predicted how that turned out? While Bitcoin’s fierce rally in December 2020 told us that a bull market had arrived, it’s fair to say that we didn’t have dog coin mania, nation state Bitcoin adoption, and a mainstream NFT boom down as key trends for 2021. This year proved that crypto often goes the way no one expects, but there are certain developments that we think are likely to characterize 2022 nonetheless. The Metaverse, for instance, is probably here to stay—at least if Mark Zuckerberg has his way. Although anything beyond that is harder to forecast, we did our best to share our thoughts on how the space will look in 2022. Read on for insights from editorial and research teams on how cryptocurrencies will move on from a year that defied all expectations.
Anton Tarasov (Head of Research at SIMETRI)
Looking at the crypto space today, it’s clear that GameFi is heating up, but its success will depend on the quality of the final products. If we don’t get at least a couple of AAA titles that nail NFTs or play-to-earn dynamics with real playability rather than just gimmicks (looking at you, Ubisoft), the niche could struggle to maintain its momentum.
High stakes are on whether or not Ethereum will complete its scheduled merge to Proof-of-Stake in 2022. I bet that it will, but another delay is likely. In software development, you spend 10% of the time doing 90% of the work and 90% of the time finishing the remaining 10%. If the merge happens, the narrative for so-called “monolithic” blockchains like Solana will take a hit.
No, Ethereum won’t become as cheap as Solana, but even some relief on the throughput and transaction prices will be enough to spark a huge wave of optimism in the community. Still, Ethereum’s move to Proof-of-Stake won’t kill the multi-chain narrative. Ethereum transactions will still be expensive, so users will flock to Layer 2s. Moreover, cross-chain composability solutions like Celestia should reduce the need to move funds to Ethereum mainnet for those who are less concerned about decentralization and security.
To conclude, EVM should thrive and become the hub of the multi-chain future. Ethereum developers will continue to push the innovation forward, but the network could lose a substantial chunk of on-chain usage if cross-chain composability emerges.
Oh, I almost forgot to discuss the Metaverse, but everyone knows that’s taking crypto and the real world by storm without my input. I would urge those following the space to be wary of NFT projects that look like they could become blue chips because of their cult-like communities then fall on their feet. That’s how you flip the MekaVerses and Brotchains of the world for 10 ETH rather than bag holding them down at a 0.5 ETH floor.
P.S.: I bet OpenSea won’t launch a token.
Brooks Butler (Reporter)
A big question for 2022 is whether the major trends that defined 2021—NFTs, the Metaverse, and Ethereum killers—will continue to grow. Either way, I predict the arrival of another big trend next year. It’s one that many have written off: digital cash solutions.
When Satoshi Nakamoto wrote the Bitcoin Whitepaper, their vision was for the invention to become the world’s ultimate digital cash solution. In fact, the header for the paper was “Bitcoin: A Peer-to-Peer Electronic Cash System.” Satoshi imagined a pure, uncontrolled cryptocurrency, yet Bitcoin’s narrative has shifted to a store-of-value or “digital gold.” Next year, I foresee people buying into the OG cryptocurrency narrative. The success of Dogecoin in 2021 proves that there is an appetite for fast, low cost crypto payments. Digital cash solutions are not dead—they’re asleep.
Switching gears, I see DAOs becoming a key focus in crypto next year. As fascinating as ConstitutionDAO’s attempt to buy a rare copy of the U.S. Constitution was, and not to deny its impact, I think DAOs will start to form for increasingly important causes in 2022. Political campaigns, for example, could be transformed by DAOs.
Within the Ethereum ecosystem, I believe that ETH will continue to outpace DeFi—whichever way the market moves. I also wonder if we’ll see an NFT sale that tops Beeple’s monumental $69 million Christie’s sale in the next few months.
Regulation sparked fears across the industry in 2021, but I’m somewhat optimistic for next year. I agree with Kevin O’Leary’s view that regulators favor innovation in capitalist environments. While there were many fears over regulators negatively impacting the space this year, there was at least some sort of dialogue taking place. While some countries will likely make efforts to crack down on the space, others will engage in healthy debate and move toward adoption. As a result, we could also see better protections for crypto users.
Chris Williams (Head Editor)
Bitcoin hit new all-time highs in 2021, but it struggled to hold its momentum through most of the year. Almost every other leading digital asset outperformed it, and its market cap dominance has slid from over 70% to 40%. I wouldn’t be surprised if it declines further in 2022.
Traders have been calling for an ETH:BTC breakout for months, but a potential “flippening” isn’t the only thing that could hurt the King’s dominance. In 2021, the market signaled that it believes in a multi-chain future, and adoption on alternative Layer 1 chains like Avalanche and Solana is growing at a rapid rate. There is precious little doubt that smart contracts are set to transform our understanding of money forever. The question is whether Bitcoin’s “digital gold” narrative will truly gain traction, because it’s going to need more than MicroStrategy and El Salvador buying the dip to maintain its position as the King.
As for Ethereum, the rise of alternative Layer 1 networks means that 2022 is its most important year yet. It will need to ship the merge to Proof-of-Stake as soon as possible to hold its market share, but devotees should be aware that there’s a good chance it won’t arrive until the second half of the year. If all goes to plan, growing attention on Ethereum should bode well for ETH in the run-up to the merge, as should the growth of ZK-Rollups like StarkWare’s Starknet. We could see a DeFi resurgence on Layer 2. Failing that, DeFi 2.0 will continue to steal the spotlight from the blue chips that emerged in 2020. Should the new wave of ZK-Rollups launch a token, at least one of them will rally like Polygon did in 2021.
Metaverse adoption should also increase as more major corporations rush to join the virtual gold rush; time will tell how that will pan out for them or if the news will be received like Facebook’s Meta play was. “Web3 social” will become one of the leading narratives of the year (though, similar to GameFi today, most of the products on the market will be underwhelming). Photography and music NFTs will have a big moment—and they won’t just be traded on OpenSea. The floor prices for many of the copypasta avatar projects that emerged in NFT summer will bleed to near zero if they haven’t already.
While newer Layer 1 crypto projects will thrive, Cardano will fail to build a usable DeFi and NFT ecosystem despite its ongoing promises. tbDEX, the Bitcoin-focussed decentralized exchange developed by Jack Dorsey’s Block, will not see any meaningful adoption. U.S. regulators will continue to push to crush crypto innovation to protect the current system, and NFT skeptics will make their voices louder with misguided arguments about the environment and hypercapitalism—especially if ETH rallies to $10,000 or more.
2022 should also be a big year for DAOs. After PleasrDAO, FreeRossDAO, ConstitutionDAO, and BlockbusterDAO, we can be sure that we’ll see plenty more examples of humans gathering to coordinate at scale via the blockchain. As with this year, all of the notable DAOs will emerge on Ethereum, too.
Jacob Oliver (U.S. Editor)
All eyes are on the Metaverse going into 2022, and understandably so. 2021 was the year of the Metaverse narrative, or the year in which we collectively decided the notion of an immersive digital world accessible through AR and VR technology—a notion as old as the science fiction novels that inspired it—simply wasn’t fiction anymore. Far more than a simple game, the Metaverse is set to emerge as a fully-fledged world in which we can transact business, own property, go to work, attend events and concerts, and spend time with our friends and families. Indeed, in the minds of its proponents, the Metaverse will be nothing short of a full alternative to reality itself.
However, it is my prediction that most day-to-day activity in 2022 and beyond will remain firmly rooted in the real world, and not simply because the idea of a fully immersive virtual reality owned and operated by Mark Zuckerberg is about as dystopian a scenario as one could possibly imagine. No, it is just that there are simply too many logistical problems associated with virtual worlds that the real world simply doesn’t have to contend with. The battery doesn’t die on real life. The wi-fi doesn’t go out on the real world. There are no 504 errors in face-to-face interaction.
Furthermore, if anything like a fully immersive Metaverse is going to exist, it will require extensive engagement with wearable technology that I don’t see as likely to catch on anytime soon. Immersing oneself in an alternative world means disconnecting from the real one to some extent, and I doubt that most people will be comfortable leaving their real worlds and bodies behind for indefinite periods of time. Leaving ourselves open to that kind of vulnerability is not the kind of behavior written into our DNA.
These realizations, I think, will be part of a larger overall cooling in cryptocurrency markets more generally. 2021 has been a year of intense excitement for the future and, arguably, a period of irrational exuberance. Money is about to get a lote more expensive thanks to the Fed’s tapering and the kinds of multi-million dollar investments we’ve seen across the blockchain industry should dry up, at least to some degree. With that, blind confidence in the space could also dry up. I think we’ll see a period in which robust projects prove their mettle while others fizzle out in the absence of new funding.
Finally, it is all but certain that we will see more stringent moves toward industry regulation, at least in the United States. In late 2021, the President’s Working Group on Financial Markets recommended that Congress exercise its authority to regulate stablecoins by legislation, and soon thereafter a joint team of regulators from the FDIC, Federal Reserve, and Office of the Comptroller of the Currency revealed plans to determine how banks would be allowed to interact with cryptocurrencies in the U.S. While I doubt that anything overtly draconian will result from these efforts, The Man eyeing the space could send shivers through the market as more rules are enforced.
Nathan Batchelor (Lead Bitcoin Analyst at SIMETRI)
While it’s difficult to predict how things will pan out for Bitcoin and the rest of the market in the latter half of the year, I have some thoughts on Q1 based on the charts I’ve been studying over the last few weeks. I’m afraid to say that I’m not optimistic of how Bitcoin or the wider crypto market will perform in early 2022 whatsoever. In fact, I think it could head back to its summer lows based on some of the patterns I’ve seen emerge on higher time frames. I have a bearish scenario for at least the first quarter of the year.
The Market Live Global survey recently cited China’s macroeconomic environment, quantitative easing, and war as some of the biggest risks for markets in 2022. Crashes like Black Thursday prove that crypto often performs in tandem with global markets, so any major macro events like this could also hurt the space next year. I believe that there will be a big buying opportunity in 2022, but timing the turning point and holding patience to get a premium entry are key. I suspect we’ll see Bitcoin head back to the low $30,000 range at some point in the next year, which means Ethereum and the wider market is also likely to suffer. On the bigger picture, I’m bullish—but the market may experience some degree of pain before we return to new highs.
Stefan Stankovic (Reporter)
We’re entering 2022 with record-high sovereign debts and central banks signaling potential tapering—two forces that do not mix well together. In 2022, we’ll see countries doing everything in their power to protect their monetary sovereignty. Many of them see stablecoins as the most imminent threat, so I think some countries will make big efforts to crush them by any means possible.
Centralized stablecoin issuers will come under increased regulatory scrutiny and will likely either be shut down or forced to acquire bank charters to continue operating. I think there’s a silver lining to this as it could set the stage for decentralized, scalable stablecoins like Terra’s UST to thrive. As a result, I predict that UST will become the world’s largest stablecoin in 2022. It might be a bold prediction, but this year has proven that anything can happen in crypto.
Speaking of threats to the establishment, that leads me to Bitcoin and my next prediction. Bitcoin has a serious public relations issue, and I think it will worsen over time. Amid the world’s ensuing energy crisis and growing ESG concerns, Bitcoin’s reliance on Proof-of-Work is shifting from its most valuable asset into its biggest liability, at least when it comes to public perception. As figures like Senator Elizabeth Warren concoct narratives about how Bitcoin miners are boiling the oceans, the general public’s fears of cryptocurrencies are growing. Because so few people understand the intricacies of consensus mechanisms and energy consumption, I think Bitcoin will continue to lose against this narrative.
Finally, one more prediction on the mainstream world and crypto for 2022: gamers and game studios will capitulate and embrace NFTs. In 2021, we saw crypto skeptics bully Discord out of integrating Ethereum. Some also tried it with Ubisoft, but they didn’t succeed. In 2022, Ethereum will become 99.9% more energy efficient as it moves to Proof-of-Stake. Companies will take advantage of that fact to jump into the space. As play-to-earn games take off, most gamers will drop their make-believe concerns for the dolphins and embrace tokenized JPEG versions of them instead.
Tim Craig (Reporter)
Judging by the insane strength of Metaverse tokens like Decentraland and The Sandbox following Facebook’s rebrand to Meta, I expect 2022 to be the year of Metaverses, Web3, and GameFi.
So far, the only game to prove that play-to-earn tokenomics can be fun and successful is Axie Infinity. But don’t get distracted by the current excess of trash cash grabs riding on the back of Axie’s success—it is going to take time for real games to be developed. In 2022, I’ll be looking out for quality blockchain games launching on Ethereum Layer 2s or Solana, of which I expect there to be at least one that matches Axie’s level of success.
Elsewhere, I see a continuation of Layer 1s chipping away at Bitcoin’s market dominance. Once these alternative chains start establishing substantial network effects like Ethereum, we’ll see a major separation of the wheat from the chaff. This leads me to my next prediction: Cardano will drop from the top 10 crypto assets in 2022. The project is already so far behind competitors like Terra, Solana, and Avalanche that even if it does find a workaround for its UTXO transaction problem, I think it will be too little too late. Good vibes and a charismatic leader can only carry a project so far, and I believe Cardano’s time is running out fast.
NFTs will continue to grow; the commitment of NFT marketplaces from several major centralized exchanges almost guarantees this. Community building and providing holders with continuous value will become a larger consideration for current and future NFT projects. I also expect Bored Ape Yacht Club to continue gaining momentum, decisively overtaking the current premier collection, CryptoPunks, after the launch of its token and play-to-earn game scheduled in the first half of next year.
Vishal Chawla (Reporter)
Although NFTs took the spotlight, DeFi held its place as the Wild West of crypto in 2021. This year, countless hacks, rug pulls, and smart contract exploits resulted in billions of dollars worth of losses. The biggest incident of the lot saw a hacker steal an enormous $611 million from Poly Network before returning it shortly after. Plenty of other hacks saw losses of $100 million or more. As cyber threats continue to evolve and the total value locked in DeFi increases, we could see the first $1 billion hack in 2022. As the ecosystem grows, now with over $200 billion locked, hackers are increasingly motivated to find and exploit vulnerabilities in smart contracts. The space will need a while to mature to prevent these large-scale attacks in the future.
2022 should also see some interesting developments in “PrivFi,” otherwise known as Privacy DeFi. Regardless of how innovative DeFi systems are, they suffer from a major drawback compared to traditional finance: the inability to shield transactions from prying eyes. But that is changing, so I expect to see PrivFi become a prominent trend. In the coming year, DeFi will integrate more privacy-focused systems, including zero-knowledge proofs and multi-party computation to offer users protection against growing on-chain surveillance. Layer 2 solutions like zkSync, Hermez, and StarkWare are already working on privacy-focused features for the Ethereum ecosystem.
This coming year could also see Layer 0s hit mainstream attention. A Layer 0 blockchain is an interoperability network that has the capacity to host individual Layer 1 blockchains, such as Polkadot and Cosmos. Both blockchains have been in development for several years, and their ecosystems have seen big developments in the last quarter of this year. In December, Polkadot launched its first five parachains after an initial round of slot auctions. Cosmos is further ahead of Polkadot in regards to cross-chain interoperability. It already lets notable networks such as Terra, Osmosis, Secret Network, Cronos, and Kava interact with one another. While both projects are still in their nascent stages of development, 2022 could be the year that they finally start to realize their full potential.
Disclosure: At the time of writing, the authors of this feature owned BTC, ETH, DOT, SOL, MATIC, ATOM, LUNA, and several other cryptocurrencies.
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Mexican billionaire says ‘buy Bitcoin’ in new year message
Mexico’s third-richest person sent out a heart-warming new year message to Bitcoin (BTC) enthusiasts on Christmas eve. Ricardo Salinas Pliego recommended moving away from fiat money and buying bitcoin in a two-minute festive video.
He gives three pieces of advice to his 957,200 followers on Twitter as part of his Christmas and New Year message before asking his followers to retweet and share:
“Steer clear of fiat money. Whether it’s the Dollar, the Euro, or the Yen –it’s all the same. It’s fake money made of paper lies. Central banks are producing more than ever.”
He pauses before pointing to the camera to say, “Invest in Bitcoin!”
Stood in front of a golden Christmas tree, the other two “presents” of advice Salinas left his followers were to let go of jealousy and to believe in oneself, particularly when pursuing freedom and innovation.
It’s no surprise that Salinas admonishes investing in BTC. As a prominent Bitcoin evangelist since 2013, his Twitter bio describes himself simply as a “Mexican businessman and Bitcoin holder.”
Salinas aims to make Mexico’s second-largest retail bank Banco Azteca the first lender in the country to do business in BTC. However, Salinas, chairman of the bank’s parent company, Grupo Salinas, was left disappointed in June this year.
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In response to his ambitious plans, Mexico’s central bank stated that cryptocurrencies like bitcoin are not legal tender and are prohibited from use in the country’s financial system. In September this year, the governor of the Bank of Mexico, Alejandro Díaz de León, dismissed BTC as a reliable legal tender, citing price volatility as a major roadblock toward full-fledged adoption.
Related: ‘Absolutely right’ to think of Bitcoin as the new gold — Mexico’s 3rd richest man
It’s unlikely to deter Salinas. He has been orange-pilling Mexico’s 128 million people since the summer and in an interview with Cointelegraph in January this year, he shared his conviction for BTC as a non-confiscatable asset.
In the interview, he also declared that he first bought BTC at $500 in 2013 through Grayscale, saying that by 2018 it was one of his “best investments ever.” He has also tweeted in favor of Bitcoin remittances, tapping into a potential $40 billion market for Mexicans sending cross-border payments to the United States.
Crypto Research Analyst Puts Ethereum At $9,000 In Six Months
Ethereum has had a good year in 2021, although the digital asset is looking to close out the year on a less than a bullish note. Nevertheless, investor sentiment around the altcoin continues to be on the positive side as most expect the cryptocurrency to do well in the coming years. One of those is a crypto research analyst at Fundstrat, Armando Aguilar, who believes that Ethereum will double in price next year.
Ethereum Heading For A Big Year
In a report on Business Insider, Aguilar noted that the year has been a choppy one for the cryptocurrency market. There were several bull rallies and crashes that rocked the market for the year, and the analyst expects to see this choppiness persist into next year. However, next year does not look to be all bad from his perspective.
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Aguilar shared with Insider that he was expecting more adoption from institutional investors into bitcoin which would lead to what he sees to be a successful year. For Ethereum, this has some important implications as the coin has now lost its footing above $4,000. Aguilar explained that he sees the price of Ethereum doing very well going into the year 2022.
ETH begins recovery towards $4k | Source: ETHUSD on TradingView.com
He puts the price of the second-largest cryptocurrency by market cap at $9,000 by the second quarter of 2022. This will be propelled by the growth of decentralized finance (DeFi), the metaverse, and NFTs.
Even with the explosive growth of DeFi in 2021, Aguilar sees this growth going into 2022 as institutional investors take more stake in the market. As this demand grows, Atheneum’s value will grow with it, putting it at $9,000 in the first half of 2022. “I believe that DeFi will play a major role for institutional capital next year,” said Aguilar. “As institutional and retail demand drove DeFi into new heights, the trends will continue to spill into 2022.”
Bitcoin Clocking Six Figures
For Ethereum to hit Aguilar’s prediction, bitcoin would also have to see explosive growth in 2022. This is why the analyst also expects bitcoin to finally hit six figures in the same time frame. He puts this up to more adoption from institutional investors as they turn to bitcoin to combat rising inflation rates. This will see the price of bitcoin finally surge towards the coveted $100,000 price.
Related Reading | By The Numbers: How Ethereum 2.0 One-Year Stats Stack Up
Additionally, institutional investors are already getting exposure to the digital asset through the various ETFs that have been approved by the SEC. Aguilar notes that funds like Valkyrie are tracking US public companies that are exposed to bitcoin through the Balance Sheet Opportunities ETF.
Just like Ethereum, bitcoin looks to be heading towards a year-end close below expectations. The digital asset continues to struggle at $48,000 going into the holidays, suggesting that a close below $50,000 for the year is imminent.
Featured image from BankrateAn, chart from TradingView.com
SWIFT Will Explore Tokenized Asset Market in 2022
Key Takeaways
- Financial messaging giant SWIFT has announced plans to facilitate the burgeoning tokenized asset market.
- It will conduct experiments in Quarter 1 of 2022 to assess its role as a connector of tokenized assets.
- Estimates by the World Economic Forum project a tokenized asset market capitalization of $24 trillion by 2027.
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The Society for Worldwide Interbank Financial Telecommunication, or SWIFT, has announced plans to support the rapidly-growing tokenized asset market.
New Year’s Plans
SWIFT, a leading provider of secure financial messaging services, has published plans to support tokenized asset markets globally by the first quarter of 2022.
To that end, SWIFT has announced that it will conduct “a series of experiments in Q1 2022 leveraging its trusted role as a central platform” to explore its possible utility within the burgeoning industry. Specifically, SWIFT says it is exploring ways in which it can “enable and improve interoperability between participants and systems during the transactional lifecycle of tokenised assets.”
SWIFT’s focus will be to help “all entities” interconnect efficiently, supporting the smooth flow of tokenized assets by linking tokenization platforms. It will only deal with regulated assets, and it will not custody cryptocurrency nor act as a direct settler of tokenized assets.
Working with other major institutions in the industry, SWIFT says it will “explore the issuance, delivery versus payment (DVP), and redemption processes, to support a frictionless and seamless tokenised asset market.”
The experiments that SWIFT has planned for next quarter will build on its past work. In May, SWIFT published work done with the consulting firm Accenture in which it examined what role it could play in supporting the adoption of CBDCs.
Chief Innovation Officer at SWIFT, Thomas Zschach, spoke of the natural fit for SWIFT to support tokenized assets globally:
“As a neutral cooperative with a reach across 11,000 institutions in more than 200 countries, and oversight by central banks globally, SWIFT is uniquely placed to engage closely in the future of securities.”
SWIFT’s announcement does little to elucidate the nature of these “experiments;” however, it is at least apparent from today’s announcement that whatever the nature of its role turns out to be, SWIFT intends to be a central player in the emerging tokenized assets industry.
Disclosure: At the time of writing, the author of this piece owned BTC and several other cryptocurrencies.
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FOMO will drive crypto adoption in 2022, says BlockFi co-founder
Flori Marquez, the co-founder of cryptocurrency custodian BlockFi, says that upwards price action, new talent and regulatory clarity combine to create a bubbling FOMO atmosphere for crypto adoption in 2022. In an interview with Yahoo on Dec. 19, Marquez also shared insights regarding industry growth in 2021.
While the number go-up technology of Bitcoin (BTC) remains the honey that draws in new adopters, Marquez suggests that crypto has become ‘more digestible’ for the average consumer than it was back in 2016. She explains that other significant drivers for growth in 2022 will be the wealth of skilled experts coming to work in the crypto industry and regulatory clarity.
The stats she cited set an optimistic foundation for growth in 2022. According to BlockFi research, one in ten people plan to gift crypto this year. Also:
“About two-thirds of Americans prefer to talk about crypto versus if you think about five years ago, only 1% of people had ever traded crypto, and 50% of Americans had never heard of crypto five years ago.”
BlockFi’s internal metrics are also indicative of burgeoning adoption. In the first year of their reward card’s operations, 75,000 signed up. Marquez points out that the figure is “absolutely huge because most fintech companies look to see about 10,000 credit cards in their first year.”
More interesting for FOMO in 2022 is the revelation that for the “majority of Blockfi’s clients–when they receive a BTC reward, they’re not selling that for cash.”
Related: Robinhood enables US users to gift crypto for the holidays
These discoveries reflect broader adoption trends across the crypto space, particularly among younger people. A recent CNBC survey revealed that 83% of millennial millionaires now own crypto. ‘Hodling’ is catching on, as similar to BlockFi’s clients, 38% plan to hold, and only 6% plan to reduce their crypto exposure in the coming year.
For Marquez, however, it’s the festive timing of new regulations and new talent coming into the crypto space that is pivotal. She comments that crypto and fintech have been huge attractors to people that are looking to learn something new and expand their careers.
“So I think we’re going to see more talent shifting from other more traditional industries into crypto and the fintech sector. And the last thing that I think we’ll see in 2022 is some regulatory clarity.”
As families come together during the holiday season with the Bitcoin price holding steady above $48k, a deep-seated, long-awaited FOMO atmosphere could drive both prices and adoption in 2022.
New survey reveals 83% of millennial millionaires now own crypto
2021 has proven to be the year of crypto adoption where institutional crypto investments and millennials turning millionaires were familiar headlines.
A new CNBC survey has revealed that a majority of millennial millionaires have invested a significant chunk of their portfolio in crypto and plan to continue their crypto investments in 2022. The survey polled investors with assets of $1 million or more, and 83% of the polled millennial millionaires revealed they had made crypto investments.
53% of total survey respondents said they hold 50% or more of their portfolio in crypto. Nearly one-third of the respondents have invested at least three-quarters of their wealth in crypto assets. While the poll results might come as a surprise to many, those who have been following the crypto boom in 2021 would know how a generation of TikTok investors made millions of dollars on investments in meme currencies.
The CNBC survey also revealed a massive generational gap in terms of investment. On one side, millennials are investing as high as 50% of their wealth in crypto, while on the other side, only 4% of the older generation have invested in digital assets and only one-fourth of the GenX owns crypto.
George Walper, president of Spectrem Group that conducted the survey for CNBC, said the new generation’s rising interest in the nascent crypto market could prove to be an issue for wealth managers. He believes these traditional managers would have to rethink their approach towards these upcoming investors. He explained:
“I’m not sure the wealth management industry has recognized that they need to think of these as completely different generations. Most firms were hoping to ignore it. But millennial millionaires are not going to just grow out of crypto.”
The survey also highlighted how the new generation is willing to take more risks with crypto rather than investing in traditional markets. The survey revealed that 48% of millennial millionaires plan to add to their crypto investments while 38% plan to hold and only 6% plan to reduce their crypto exposure in the coming year.
Apart from a surge in crypto millennial millionaires in the US, Australia has also seen a 10% growth in crypto adoption over the past year. The 2021 Independent Reserve’s Cryptocurrency Index (IRCI) that surveyed 2000 people found the crypto investment among Australians has grown to 28.8%, up from 18.4% in 2020.
Kaspersky Experts Assess The Biggest Cyberthreats In Crypto For 2022
Don’t read this Kaspersky report if you’re prone to paranoia. The cybersecurity experts and antivirus manufacturers released its annual “Cyberthreats to financial organizations” paper and two items are about cryptocurrencies. Prepare to be spooked. The report begins with an evaluation of last year’s predictions and they were only wrong about one, and not by much. Plus, this year’s cyberthreats sound very much like a possibility. Luckily, you found this article and can prepare yourself accordingly.
Related Reading | Hackers Nab $16 Million In BTC Through Bitcoin Wallet Exploit
Both Cybercriminals And State-Sponsored Actors Will Target Cryptocurrencies
First, Kaspersky paints the picture and gives us the least scary threat:
“The cryptocurrency business continues to grow, and people continue to invest their money in this market because it’s a digital asset and all transactions occur online. It also offers anonymity to users. These are attractive aspects that cybercrime groups will be unable to resist.”
And then, Kaspersky makes our skin crawl:
“And not only cybercrime groups but also state-sponsored groups who have already started targeting this industry.”
As the honeypot grows, criminals will be increasingly attracted to cryptocurrencies. That much we can deal with. However, the state-sponsored groups are also a logical progression. How could they not target cryptocurrencies? And they’re going to use much more sophisticated methods to get at you. For example:
Friendly reminder that @fold_app recently partnered with @NianticLabs, backed by the @CIA #DeleteFoldApp https://t.co/IdyXO5eAKb
— Louisa Alexa (@LouisaAlexa) November 24, 2021
The people behind Pokémon GO recently partnered with Bitcoin rewards card Fold App to make a Bitcoin-themed Pokémon GO clone that pays in BTC. We have no idea if what this Twitter user says holds any water, but the whole enterprise does sound suspicious. And in light of this prediction by Kaspersky, even more so.
However, just to be clear, NewsBTC knows nothing about Niantic Labs and the Fold App. Do your own research.
BTC price chart for 11/26/2021 on Oanda | Source: BTC/USD on TradingView.com
Manufacturing Fake Devices With Backdoors
Once again, Kaspersky makes us rethink our security methods:
“While some people consider it risky to invest in cryptocurrencies, those who do realize that their wallet is the weakest link. While most infostealers can easily steal a locally stored wallet, a cloud-based one is also susceptible to attacks with the risk of losing funds. Then there are hardware-based cryptocurrencies wallets. But the question is, are there sufficiently reliable and transparent security assessments to prove that they are safe?”
However, their prediction is much more concerning:
“In the scramble for cryptocurrency investment opportunities, we believe that cybercriminals will take advantage of fabricating and selling rogue devices with backdoors, followed by social engineering campaigns and other methods to steal victims’ financial assets.”
There are already horror stories about dubious software wallets that end up in lost funds. And yeah, fake hardware wallets seem to be a logical next frontier. Just this year, following the Ledger hack, reports of weird-looking Ledger wallets took over the Internet. However, if a more sophisticated criminal made a better-looking device, it could wreak havoc through the cryptocurrency community.
And if Kaspersky says it will happen…
Related Reading | DeFi Hack: Vee Finance Losses $35 Million To Hackers Following Mainnet Launch
Kaspersky Identifies Even More Cyberthreats
The “Cyberthreats to financial organizations” contains a few more items that aren’t fully related to cryptocurrencies, but may be of interest to all of you. They predict “an exponential growth in infostealers,” and a rise in ransomware from “small regionally derived groups.” Plus, data breaches in Open Banking, Mobile Banking Trojans, and identify risk in remote workers using company equipment for entertainment purposes. Read the whole thing and be prepared for everything.
Featured Image: vickygharat on Pixabay | Charts by TradingView
China wants US senators to ‘stop making trouble’ out of digital yuan
The heat is rising between the United States lawmakers and Chinese officials even before the Olympic flame ignited at the 2022 Beijing Winter Games.
During a press briefing on Tuesday, Chinese Foreign Ministry spokesman Zhao Lijian addressed U.S. senators’ warning letter to the U.S. Olympic and Paralympic Committee regarding the use of digital yuan at the Olympic games next year.
Calling for the U.S. politicians to “abide by the spirit stipulated in the Olympic Charter,” Lijian asked them to “stop making sports a political matter and stop making troubles out of the digital currency in China,” the South China Morning Post reported.
Claiming that the recent actions revealed the ignorance, Lijian suggested U.S. lawmakers “figure out what a digital currency really is.”
Earlier this week, Republican senators Marsha Blackburn, Roger Wicker and Cynthia Lummis wrote a letter to U.S. Olympic and Paralympic Committee board chair Susanne Lyons. Highlighting the allegation that digital yuan can be “tracked and traced” by the People’s Bank of China (PBoC), the three requested officials prevent U.S. athletes from using or accepting Chinese digital currency.
Claiming the Chinese Communist Party could use the digital currency to surveil visiting athletes upon their return to the United States, senators said the new features of digital yuan enables Chinese officials “to know the exact details of what someone purchased and where.”
In the letter, the three requested a briefing on the topic for the Senate Committee on Commerce, Science and Transportation within 30 days.
Related: US lawmakers don’t want Olympic athletes to use digital yuan at 2022 games
On the other hand, China regards the Beijing Winter Olympics, slated for next year, as the first test of China’s central bank digital currency by foreign users.
Speaking at the Boao Forum for Asia in April, PBoC deputy governor Li Bo said, “For the upcoming Beijing Winter Olympics, we were trying to make e-CNY available not only to domestic users but also to international athletes and like visitors.”