Analysts predictions for cryptocurrency in 2022.

Ranging from a bitcoin meltdown to governmental crackdowns, analysts have given their top prediction for Bitcoin in 2022.

The year 2021 was the most successful in the cryptocurrency industry's history. And this is not simply because token prices increased, some by hundreds of percentage points, demonstrating that huge crypto returns are still very much a possibility. More importantly, this year's crypto boom was fueled by widespread adoption, integration, and innovation, as evidenced by El Salvador's bitcoin adoption and the use of NFTs by large corporations and prominent celebrities.

So what happens after the greatest year of all time? Probably a less-than-spectacular year.

See also: Crypto Bear Market; When to buy and when to sell.

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This past year was unprecedented, not least because the day-trading excitement that erupted during the 2020 COVID lockdowns was translated into widespread acceptance and innovation by companies such as Twitter.

And crypto is in general highly cyclical, with new converts becoming overextended and burned, then retreating to lick their wounds and learn before diving back in. However, 2021 already disrupted crypto's formerly regular boom-and-bust cycle, so anything is possible.

Even though it is less spectacular than 2021, 2022 will see significant changes, including the launch of Ethereum 2.0 (finally!) and a likely pullback from NFT-mania.

And, as the industry matures, there will be plenty of funds available to fund the continued development of fascinating initiatives, as well as plenty of opportunities for involvement for those who pay attention. There are also significant real-world influences on crypto, ranging from US interest rates to inflation to COVID variants — some more predictable than others.

See also: Airdrops: The Fastest Way To Begin Your Cryptocurrency Journey.

The total token market becomes flatter.

At the very least, anticipate a period of volatile and essentially flat token markets. I'm increasingly sure that we will not witness a major downturn on the scale of 2018, but 2021 was such a massive year that a mathematical return to the mean is likely. Experts believe there is a good chance bitcoin will surpass $69,000 for the first time by the end of 2022, though I would not count on it being sustained until 2023.

Eth2 makes an appearance.

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Years in the making, Ethereum's move to proof-of-stake (PoS) will eventually take place this year when the new PoS Beacon Chain joins with the current proof-of-work (PoW) chain. This entails some risk, and the primary benefits of the change may not materialize until 2023 when the new Ethereum begins implementing sharding.

The most critical point to remember is that, at least until sharding is implemented, the PoS switch is NOT expected to affect Ethereum's transaction fees. Due to the fact that high fees have been a significant factor in the rise in popularity of other layer 1 blockchains such as Avalanche over the last year or two, the Ethereum update should not significantly interrupt that momentum.

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Bitcoin mining will be restricted in many countries

Arcane Research expects that more nations with poor grids or insufficient energy supply will restrict bitcoin mining next year, "while other energy-rich jurisdictions will embrace the business."?Unfortunately, countries and their inhabitants will face constraints on their participation in Bitcoin, both for their benefit and for the benefit of the network itself.

However, there are some short-term benefits here. The prohibition of mining in countries with insufficiently robust or sustainable electric grids should direct more hash power toward cleaner energy sources, potentially mitigating some of the one-sided environmental, social, and governance (ESG) criticism that gained traction this year, largely due to Tesla CEO Elon Musk.

The inflationary story surrounding Bitcoin is put to the test.

Bitcoin did not respond to rising inflation in the way that it should have, based on the "inflation hedge" argument advanced by many proponents. This is because adoption has not yet reached a level where the underlying pricing is sufficiently stable. However, if inflation persists or accelerates, even for the first half of the year, bitcoin's story will need to demonstrate a market response to be credible in the mid - term.

Meme coins will lose their hype

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Meme coins are essentially a casino, but they benefit from positive feedback loops, as winners generate significant public interest, which keeps the winning streak going. On the other hand, a downward or sideways cycle can be particularly severe. In 2022, newbies to cryptocurrency will exhibit less ape-like behavior and consolidation around informed investment. This means that coins such as doge will continue to lose steam, and fresh pumps will provide limited upside.

(Shiba inu is an intriguing exception to this rule, and a possible instance of how to transform a meme into a viable project. Its ShibaSwap DEX appears to be rather fascinating on the surface, though I cannot say for certain whether it would elevate the project above meme coin level even if it works.)

DAOs will be the subject of intense regulatory scrutiny.

However, unless someone utilizes a decentralized autonomous group to commit a truly mad crime, we may not see actual laws or enforcement. There is much discussion about how DAOs are the "new corporate" and how governments control them. This is also the point at which decentralization comes to a halt: some fully decentralized groups will be able to evade regulation to one degree or another. Those who are faking it will be whacked.

More countries are adopting bitcoin.

Immediately following El Salvador's announcement of its new bitcoin policy, reports surfaced that other countries, primarily in South America, were mulling similar measures. They just received a big nudge from the Bank of England, which was granted permission on Dec. 21 to effectively take roughly $2 billion in Venezuela's gold holdings. Rather than that, it may turn over the gold to Juan Guaido, a Venezuelan "opposition leader" who is a favorite of Western intelligence agencies.