A poll from 2022 showed that 21% of Americans had used cryptocurrency in some form.
But even with so much crypto adoption, many investors, new and old, are a bit confused about how to plan their investment strategy. You want to make sure that you succeed with your cryptocurrency investments and build financial stability with them.
This guide will show you the cryptocurrency trends that are dominating this year to help you make your decisions.
Here’s what you need to know:
1. Bitcoin Will Still Dominate
No matter how high the Bitcoin price rises, it’s still the best cryptocurrency option available.
This is because Bitcoin is the only cryptocurrency that can’t be controlled by a company. Bitcoin’s source code is fixed and can’t be altered. This gives the ultimate freedom as anyone can own Bitcoin but no one can control it.
Bitcoin will also serve as the preferred currency for many communities. It’s already become legal tender in countries such as El Salvador and the Central African Republic.
It’s also a great alternative to the threat of CBDCs. This brings us to the next trend that will likely dominate this year.
2. The Advent of CBDCs
CBDCs are “Central Bank Digital Currencies” which are a digitized form of a fiat currency.
You already use the currency that your country’s central bank offers. While you might not think about it, this is one of the biggest injustices in our financial world today.
This is because your national currency loses value each day. This is because the central bank can print as many notes as they wish. The higher the circulation is, the weaker the currency’s value is.
Until cryptocurrencies came about, we really didn’t have an option other than using a fiat currency. Now, CBDCs present an even bigger threat and injustice than our paper money.
Since CBDCs are digital, they can get controlled by your central bank. This means that with the press of a button, your money can get turned off. It means that the CBDCs can have an expiration date.
This will be a method of control for governments to control their populace. Anyone who has an opinion that isn’t “acceptable” can have their CBDCs turned off. Dissenters or protestors can have their CBDCs turned off.
If cash goes away, we don’t want CBDCs to be our only form of currency. As a result, cryptocurrencies are rapidly becoming an alternative to adopting CBDCs.
3. Bitcoin Maximalism vs. Altcoins
One of the most important crypto trends that will dominate this year is the debate between Bitcoin and Altcoins. Altcoins refer to all cryptocurrencies other than Bitcoin.
Some cryptocurrency enthusiasts believe that Bitcoin is not only the best cryptocurrency but the only one that you should invest in. This is referred to as ‘Bitcoin Maximalism.’
Other investors feel that when you want to purchase cryptocurrency, there are many factors to consider. Among the most popular factors are price, growth projection, and uses.
For example, they might make a case for investing in Ethereum. This is because it’s always been more affordable than Bitcoin. Ethereum also gets used for investing in digital assets such as NFTs.
Likewise, Bitcoin Cash has become a currency on many Caribbean islands. It’s also great for fast transaction speeds and isn’t expensive.
However, for many investors, Bitcoin is the only option. This is because of Bitcoin’s independence. Since Bitcoin can’t be controlled by a company, many investors feel that it’s the purest form of money we’ve had so far.
You’ll have to do your own research on whether you want to invest in Bitcoin only, Altcoins only, or a mixture of the two. As always, just make sure you only invest what you’re willing to lose!
4. A Possible Downturn of Stablecoins and Memecoins
Some crypto predictions might state the exact opposite, but we think we’ll see a possible downturn in stablecoins and memecoins this year.
Stablecoins refer to cryptocurrencies that are tied to fiat currencies. An example would be USDT which is tied to the US Dollar. However, all stablecoins are stored on exchanges. There have been some exchanges that aren’t too trustworthy.
Memecoins are cryptocurrencies that have been made as a joke. An example would be Dogecoin, which was still rather popular with investors looking to make a quick buck.
This doesn’t mean that you should immediately dismiss investing in stablecoins and memecoins. However, be cautious if you decide to invest in them. You might end up losing your investment due to the uncertainty of regulations and the exchanges.
While there is always a case to store your cryptocurrencies and purchase cryptocurrency from exchanges, this year you must learn self-custody.
We expect that a move toward more self-custody is a crypto trend that’ll dominate this year. This means that you’ll have to learn how to store your crypto in hardware wallets.
This means you’ll have to learn how to set up a hardware wallet with a pin code and recovery phrase. You’ll also have to learn how to trade, buy, and sell crypto using your private and public keys.
This is a lot more technical and that’s why it isn’t as popular. But as cryptocurrencies become more popular, more people will realize the importance of self-custody.
This is the best way to protect your investments from hackers. It also gives you complete control over your cryptocurrencies.
However, you still want to have some crypto on an exchange so that you can make faster transactions and quick purchases.
Keep an Eye On These Cryptocurrency Trends
Now you know the important cryptocurrency trends and how you can prepare for investing this year.
Bitcoin will remain the most popular cryptocurrency this year. Many investors will solely stick to investing in Bitcoin as a result. You can expect more debates on whether one should invest only in Bitcoin or consider Altcoins.
It’s important to take precautions if you decide to invest in stablecoins or memecoins. Make sure you also learn how to protect your cryptocurrencies using hardware wallets.
You can find more great cryptocurrency content here on our website.