Covid-19 shook the global economy in 2020, and the trickle-down effect continued in 2021. That led to a historical rise in inflation and the lowest-ever interest rates. That in turn led to a lot of people delving into crypto and digital assets, since they provide an effective hedge against inflation. As a result, many people formerly not interested in cryptocurrency also wanted to enter the market and profit from it. Inflation worked in favor of crypto, and Bitcoin reached its all-time high prices. Institutional investors also started diversifying their portfolios with crypto assets to effectively manage inflation. Many banks and financial institutions started to offer crypto products for investors as there emerged a high demand for the same. In 2022, things might work differently.
With the global economy stabilizing slowly, 2022 might see a reduction in inflation rates. At the same time, interest rates in banks and traditional investment instruments are also set to grow. That has a high possibility of deterring many people from something as volatile as crypto. As a result, Bitcoin adoption rates might slow down in 2022, along with the growth of other cryptocurrencies.
However, another school of thought believes that crypto will continue to grow in 2022 since people already realize its value. Institutional investors, according to many, will play a key role in the future of the crypt 2022.
