Crypto Market is Predicted to Give Better Returns than Stocks in 2022

Cryptocurrencies and NFTS are more trusted than stocks to give investors better returns in 2022, experts reveal. Beginning of the new year finds that 30% of respondents believe that ‘another cryptocurrency’ (other than Bitcoin) will yield the best results; 25% say Bitcoin and NFTs (non-fungible tokens); and 20% believe stocks will outperform the others. Stocks, which have always traditionally made up the bulk of successful investors’ portfolios, are falling out of favour and it seems as a way to create and build wealth, with digital assets taking over.

Also, it’s surprising that it's believed by investors that ‘other’ cryptocurrencies - and not the headline-grabbing, dominant Bitcoin - will out-run other asset classes this year in terms of returns. First, investors are predicting that the markets in 2022 will perform in a similar way to 2021. Cryptocurrencies, even despite the slump in December, had a remarkable year. Bitcoin ended the year up almost 65%, meanwhile, the S&P500 - the benchmark index of the world’s largest economy – managed around 28%, and gold was down around 7%. However, past performance is no guarantee of future returns, of course.

Secondly, rising prices, supply chain bottlenecks and a shortage of qualified workers continues to push inflation, which is a major concern for global investors as their spending power is being eroded. Bitcoin and other digital currencies are widely regarded as a shield against inflation mainly because of its limited supply, which is not influenced by its price.

Thirdly, critically, investors are increasingly confident that digital currencies are the inevitable future of money. In our increasingly tech-driven, globalised world, it makes sense to hold digital, borderless, decentralised currencies and/or other digital assets, such as NFTs. Nigel Green, Bitcoin expert says that Bitcoin might have been pushed down the ranking below ‘another cryptocurrency’ due to growing investor insight into the crypto market.

Experts say that another cryptocurrency would produce better results in 2022 over Bitcoin, they were probably thinking of its main rival, Ethereum. Ether has a higher level of real-use potential as Ethereum – the platform on which it is the native cryptocurrency – is the most in-demand development platform for smart contracts, thereby highlighting that network’s value not only as a platform for developers but as a worldwide financial utility.

Deepak Sahu, President & CEO, VARINDIA