Commentary: Greater acceptance of cryptocurrency for payments is likely in 2022
AN INCREASE IN NFT ACTIVITY
The year 2021 brought a new wave of NFT sales. An NFT can offer proof of ownership, for example, of digital art in the same way that a physical canvas can offer proof of ownership of a Vincent Van Gogh painting.
Although NFTs started out as a way to formalize digital art ownership, it has since expanded to include other types of digital property, including digital real estate.
NFT sales set new records – a recent one brought in US $ 17.1 million at Sotheby’s. As a result, the auction house launched Metaverse, an NFT-only marketplace to facilitate sales of digital works.
As new NFT applications emerge, this space will likely continue to grow in 2022.
Despite these investment opportunities, we urge crypto investors to be skeptical of the claims they read in online communities. At a minimum, crypto enthusiasts should do their due diligence before investing.
What is sure to emerge in 2022 are new frauds and new schemes. Take, for example, the crypto SquidGame which capitalized on the popular Netflix show but was a fraud. Or the fake Banksy NFT that sold for £244,000.
Research on the behavior of retail investors has found that some are very sensitive to the “fear of missing out”.
Therefore, it can be difficult to turn down a tip from your barber or your best friend’s cousin on the next hot crypto opportunity.
However, crypto investors should educate themselves about the technology and the basics of the financial markets if they are to become cautiously involved.
Crypto, after all, is still speculative and not for everyone.
Erica Pimental, Bertrand Malsch and Nathaniel Loh are Associate Professors and Research Fellow at Queen’s University in Ontario. This comment first appearance on La Conversation.