The analysts leading the study said the cryptocurrency market would grow if it achieved greater integration, capacity, and speed in transactions. They noted that Ethereum could not communicate well with other networks, affecting its dominance and value in the market.
Multinational investment bank JPMorgan recently published a report predicting that 2022 will see higher interoperability between blockchains and financial tokenization. Kenneth Worthington and Reginald Smith, who led the study, believe that 2022 will be crucial for the cryptocurrency market.
However, the research analysts stated it would depend on greater integration, capacity, and speed in transactions. They explained that updates to the Ethereum network and the emergence of second-layer solutions would contribute to that.
The Outlook for Bitcoin in 2022
Everybody wants to know what will happen to Bitcoin (BTC) and Ethereum (ETH) in 2022. In that regard, JPMorgan said that the solid design of Bitcoin as a modern store of value has helped increase its trust and value.
However, the analysts warned that Bitcoin was not yet at the level of gold, among other stores of value. According to the investment bank, the reason for that is its limited history. They also consider that the volatility of the crypto asset prevents it from becoming a currency, strictly speaking.
Bitcoin is currently trading at around USD 41,731 and has accumulated a 1.8% loss in the last 24 hours. Its daily trading volume is above USD 28.09 billion, and its market capitalization is about USD 789.79 billion, according to CoinGecko.
Predictions about Ethereum this Year
Concerning Ethereum, JPMorgan believes that the use cases of that cryptocurrency are superior to those of Bitcoin. The analysts wrote that the former is a digital canvas or software platform while the latter is a digital security. They said that Ethereum enables developers to create new crypto and traditional apps.
However, the researchers pointed out that the Ethereum network has a serious congestion problem. Besides, they mentioned that it could not communicate well with other networks. JPMorgan predicted that the success of the cryptocurrency market would depend precisely on the ability to integrate different blockchains.
The analysts from JPMorgan stated that Solana (SOL) is much faster, Cardano (ADA) more scalable, and Polkadot (DOT) more interoperable than Ethereum. In other words, those solutions could undermine the dominance and value of Ethereum in 2022. Despite that, Worthington and Smith consider that Ethereum could maintain its advantage if what its developers planned on its roadmap for this year comes true.
Ether, the cryptocurrency of Ethereum, is trading at around USD 3,078 and has accumulated a 3.8% loss in the last 24 hours. Its daily trading volume is above USD 19.72 billion, and its market capitalization is about USD 366.48 billion, according to CoinGecko.
The Future of the DeFi and NFT Crypto Markets
Regarding decentralized finance (DeFi) and non-fungible tokens (NFT) crypto markets, the researchers highlighted they are still in the early stages despite gaining strength in 2021. For that reason, they expect them to show a higher potential this year.
The analysts foresaw the tokenization and fractionation of credit, stocks, parts of real estate, and non-negotiable investments, including private equity. They also noted that the DeFi sector has a high potential despite its poor performance in 2021.
By Alexander Salazar
