Crypto Space Today, and What to Expect Tomorrow
To be sure, even the laziest today are talking about the fall of Bitcoin. But crypto traders and investors, and just those who are present on the cryptocurrency market, understand perfectly well that the rollback is natural. And besides Bitcoin, there are plenty of events on the market. But, we will not break traditions, and we will also say a few words about the military-technical cooperation
Against the background of the fall in the price of Bitcoin (BTC), which according to Coinmarketrate.com It happened on January 21, settlements on exchanges that day exceeded $ 727 million, and settlements on the derivatives market amounted to $2.49 million, according to CoinGlass.
A few days earlier, this media reported on the analysis of Willy Wu, who stated that BTC is close to reaching the bottom in order to rebound and continue to grow. However, analyst Juan Rodriguez noted that there are reasons for the fall in the global macroeconomic environment, including the threat of the Central Bank of Russia to ban Bitcoin trading and mining. These factors make him believe that the price will not recover in the short term.
Against this bearish background, on January 21, the difficulty of mining BTC set a new historical maximum – more than 25T, which is almost 9% more compared to the previous difficulty. This happened at the same time when Eric Teden, vice president of the European Securities and Markets Authority (ESMA), called for a ban on Bitcoin mining, or rather, mining on the principle of “Proof of work” -Proof-of-Work (PoW). The official believes that abandoning this practice will help meet plans to reduce greenhouse gas CO2 emissions that cause climate change.
But, it is worth paying attention to other topics.
Developers, Market Cleaning and Regulation of Crypto Advertising
One of the most famous Bitcoin developers, Gregory Maxwell, has warned that lawsuits and legal problems are a new threat to developers. He said that anyone involved in the development of Bitcoin “risks becoming the subject of multibillion-dollar lawsuits,” so many chose to stay away.
On the other hand, the analytical firm CryptoCompare in its latest report predicts an imminent purge of cryptocurrency projects, such as meme-based or NFT, due to the “significant challenges” facing the technology. Remember the crypto winter of 2017-2018, when a lot of crypto projects self-destructed.
And, according to a group of JP Morgan analysts, Ethereum is losing its share in NFT trading. The researchers determined that the network has lost 15% of its presence in this market, dropping from 95% to about 80% since January 2021. They note that other blockchains absorb the share of projects and applications that run away from the high cost of Ethereum, and developers prefer to place their projects in new, inexpensive networks.
And finally, it is worth mentioning that the Spanish National Securities Market Commission (CNMV) has published rules that will regulate advertising related to Bitcoin and other cryptocurrencies. According to the circular published by the regulator in the Official State Gazette, the legal rules will come into force on February 17. In this regard, CNMV President Rodrigo Buenaventura justified the inclusion of influential persons among the subjects of the new regulation as a measure to prevent “veiled and misleading” advertising of the military-technical cooperation.
At the same time, the Federal Security Service of Russia confirmed the liquidation of one of the largest gangs of extortionate software REvil.
But that’s all we already have. And what to expect next?
The Best Cryptocurrency Trends to Focus on
Of course, many expected that the current cycle of the cryptocurrency market would end at the end of 2021.
Bitcoin did reach a new historical high of almost 70k in early November, but it has also retreated significantly since then. Many indicators suggest that we are not yet close to the end of the cycle, and given that the cryptocurrency market as a whole slowed down significantly by the end of the year, it is likely that this cycle will last in the second half of 2022 and possibly even in 2023.
What awaits us in 2022? A lot.
Considering that we still have 11 months or even more ahead of us, we can see many trends in the cryptocurrency space of 2022. We should expect some surprises, as is often the case in the cryptocurrency space or any other new and rapidly developing technology.
So, what should we expect?
Crypto-gaming and the Metaverse
This is pretty obvious, and it’s a continuation of the theme that dominated the cryptocurrency space in the second half of 2021.
Crypto-gaming and Metaverse will remain one of the main trends, if not the main trend, over the next few years and will probably become one of the key elements of the mass adoption of digital currencies.
Many projects that received IGO in 2021 are planning to release their games in 2022, so we will see which projects will succeed and bring huge profits to their investors, and which will fail or, perhaps, they will need more time to become successful.
Volatility
Perhaps the most immediate storyline that is already breaking through in 2022 is the volatility of cryptocurrency prices.
Of course, crypto assets such as BTC, Ether and others are inherently prone to sharp fluctuations. But in just a few short weeks, Bitcoin has already had a fair ride this year. Starting at $46,000 in 2022, the world’s largest cryptocurrency dropped by 14% over the next 10 days, causing its rate to drop below $40,000. After that, the Cue Ball, at the moment it is in the region of $34,000.
Altcoins, including Ethereum, Solana and Polkadot, as well as meme tokens such as Dogecoin, have shown sharp price spikes in recent weeks, as has everything from technology company stocks to the stock prices of new public companies.
The Cardano Ecosystem
Cardano (ADA) has been on a downward trend since the release of smart contracts in early September 2021. Although we have seen a small breakout in the last few days, it seems that we will see a continuation of this general downward trend (or sideways movement) until we see the true usefulness of the Cardano ecosystem. This will happen, maybe, and may take several months. If the market as a whole picks up, we will most likely see Cardano grow as well, but a real parabolic upward movement will probably only happen after the entire ecosystem is properly launched.
The Evolution of Ethereum
Since Bitcoin has the same carbon footprint as the country of Kuwait, the ecological footprint of cryptocurrencies has long been a concern for everyone – from legislators, consumer protection groups to company executives and just babblers.
Now the network behind the second largest cryptocurrency, Ethereum, hopes to turn into Ethereum 2.0 – a completely new blockchain.
This year, after many years of waiting, the Ethereum blockchain is preparing to switch to the so-called proof-of-stake (PoS) model. According to Ethereum’s followers, this transition will make the blockchain more scalable and secure, as well as more environmentally friendly, compared to the current proof-of-work (PoW) system, on which it relies just like Bitcoin.
The environmental problem associated with PoW is that the so-called miners spend a huge amount of energy on performing mathematical calculations and, as a result, create new VTS or ETN. Proof of stake, on the other hand, is based on the premise that several people or a group delegate the native currency of the platform (in this case, Ether) to stake in order to confirm transactions.
According to the Ethereum Foundation estimates, as a result, the power consumption of the network will be reduced by 99.95%.
However, the “merger”, which will finally transfer Ethereum from the proof-of-work principle, has already been postponed earlier, which makes us think about how the final stage will take place. Currently, the Ethereum Foundation believes that this transition will happen in the second quarter, but this is not certain.