What's next for bitcoin and crypto? The trends to watch in 2022
The debate on cryptocurrency is still raging, as countries decide whether to embrace, regulate or ban cryptocurrencies.
On top of this, the energy-intensive sector has recently come under fire from climate experts.
Crypto experts share their predictions for 2022.
From El Salvador adopting bitcoin as legal tender - a world first - to China banning all cryptocurrency transactions, 2021 was an eventful year in the world of digital currencies.
Will 2022 hold more surprises? We asked five crypto experts what to look out for.
Environmental fallout
The steady growth of the cryptocurrency industry over the years has drawn more attention to its carbon footprint.
Bitcoin and other cryptocurrencies are created or "mined" by high-powered computers competing to solve complex mathematical puzzles, which guzzle energy and fuel planet-warming emissions unless they run on power from renewable sources.
Bitcoin mining is currently estimated to account for about 0.5% of global electricity consumption, using up more power than Sweden does in a year, according to an index compiled by the University of Cambridge.
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Central banks go digital
State-issued digital coins will begin to compete with cryptocurrencies in 2022, as more nations trial their own central bank digital currencies - or CBDCs - said Eswar Prasad, a trade policy professor at Cornell University in New York.
"Central banks around the world are bowing to the reality that digital payments are becoming the norm," he said.
"Maintaining the relevance of central bank money in retail transactions necessitates the creation of digital versions of their currencies."
From Russia to Chile, many countries have started to look into CBDCs, with tests and rollouts scheduled for 2022.
Some, like Japan and Sweden, have already started trials.
China has coupled its CBDC plans with a sweeping ban on cryptocurrencies and India is looking to do the same.
Legal tender
While some nations look to ban cryptocurrencies, others might choose to bring them into the financial fold instead, said Hoptner of BitMEX.
"Inspired by the El Salvador 'experiment' ... more developing countries will embrace bitcoin as legal tender," he said.
In September, the Central American country became the first to adopt bitcoin as valid currency alongside its local currency, the U.S. dollar.
Taming the 'wild west'
In August, the chair of the U.S. Securities and Exchange Commission described the world of decentralised finance platforms - also called DeFi - as a "Wild West", urging Congress to give the agency more authority to police the currently unregulated, blockchain-based banking services.
Worried about the lack of consumer protection and the weak standard of anti-money laundering checks, regulators around the world put trading platforms under increased scrutiny throughout 2021.
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