Threats to Crypto in 2022

The year 2021 was a great one for crypto, but the beginning of this year wasn’t. Bitcoin dropped around 40%, which caused bigger losses for smaller cryptocurrencies.

It is predicted a long period of depressed prices, and while it is too early to know there are some threats to the cryptocurrency industry in 2022, so be aware of these four:

Wider Economic Conditions

Bitcoin was designed to be a currency that didn’t need a central authority, but sometimes the crypto community believes it is immune to what’s happening to the rest of the world.

The thing is, as crypto becomes mainstream, the wider economy plays a more significant role.

Increased Regulation

The constant need to regulate cryptocurrencies has been around for some time. Different nations are trying to handle this without damaging it, in May 2021 China got involved and the cryptocurrencies prices dropped.

While some countries don’t agree with China, they do want some strict regulations because some crypto projects offer bank-like services but without common rules.

Another thing about crypto projects is that they are similar to stock investments, but without the transparency requirements that prevent things like market manipulation.

Potential Collapse of Tether

The value of Tether is linked to the U.S. dollar, meaning the USDT value should always be worth $1, so it should always have money in reserve.

There is little information and a lot of speculation of what Tether is doing, the thing is, as Tether takes the investor’s money there is a big risk of losing it.

Scams and Fraud

Last year crypto scammers made $14 billion in cryptocurrency.

These kinds of criminal activity lower the investor’s confidence, they no longer want to get involved and shoppers are less likely to use crypto for payments.