Which Crypto: 2021-2022 Roundup
As 2021 draws to a close, the crypto market is stronger than ever before. Bitcoin sits at around $47,000 exactly double what it was worth this time last year. As we all know, there have been many record gains alongside some serious drawbacks. In this article we will look at the current state of the market and what we can likely expect in 2022.
As mentioned above, the current price of Bitcoin is just over $47,000 representing just over a 100% gain if you had bought Bitcoin this time last year. The digital currency market as a whole is currently worth $2.1 trillion with highs of $3 trillion touched upon as little as 6 weeks ago. Bitcoin still remains the dominant crypto with just over 40% of market share with Ethereum close behind at 21%.
Without stating the obvious, 2021 has been a bumpy ride underlining the most successful cryptocurrency trading strategy is the long term buy and hold. No matter how smart people claim to be, no one can out play the market, especially an unregulated one so open to manipulation.
So, going forward what can we expect from crypto in 2022?
Regulation needed as soon as possible
As we have discussed many times before the market desperately needs some form a comprehensive regulation that will both protect consumers, deter bad actors and encourage further investment from those less averse to high risk management.
It is my belief that this regulatory approval is closely tied to the ongoing court case between the Securities and Exchange Commission (SEC) and Ripple Labs. Unless you have been living under a rock for the last year or are extremely new to crypto you will understand that Ripple is currently being sued by the SEC for the apparent offering of its native token asset XRP as a security in the early days of the company’s formation. Ripple argue that the XRP is a utility token with a distinct purpose which does not constitute an investment and therefore is not a security which is regulated under SEC authority.
This case is key to the whole cryptocurrency market. If, as many people are beginning to believe, the court rules in Ripples favour the closure of the case will provide clarity on just what cryptocurrencies truly are. Indeed, the case will surely determine a completely new asset class which is somewhere between investment vehicle and utility token.
Looking forward, looking back
The case against Ripple is close to a year old now with progress and information from both sides seemingly stagnant. However, there is optimism that there may be resolution sometime in the new year. In terms of market development cryptocurrency and blockchain are still relatively new in the product lifecycle and as the world adjusts to a post COVID reality the continued emergence of a complete digital immersion is more than inevitable. If 2021 was the year people woke up to the use case of crypto then perhaps 2022 is the year when the adoption is cleared for take off. Only time will tell.
Author: Mark Harridge
Mark Harridge first came across Bitcoin and began to use its peer-to-peer payment network in mid to late-2011. He quickly understood that this technology would change the world. Mark is passionate about crypto adoption, from a macro economic and institutional perspective, and the numerous factors that fuel the relentless march towards individual self sovereignty and the decentralised society of the future.