Key Points
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As a result of a long-awaited technology upgrade, Ethereum is gaining superpowers.
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In spite of the fact that Bitcoin is not the ultra-stable alternative to gold it was supposed to be, the market may take some crucial steps towards it in the near future.
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Ripple’s legal issues have wide-ranging ripple effects (har-de-har) on the rest of the crypto sector.
As the market continues to evolve, investors should pay close attention to these three crypto names.
Cryptocurrencies are still in their infancy. Despite their maturity, even the most mature digital currencies are constantly evolving their code, their long-term goals, and their philosophical approaches. The world’s regulators are trying to figure out how to regulate crypto trades, ownership, and taxation.
Crypto prices remain volatile despite the turmoil. As ordinary investors, we are scratching our heads, trying to figure out what to do. This ever-changing market makes building a successful long-term investment portfolio challenging.
Despite this, there is light at the end of the tunnel (and I don’t think it’s an oncoming train). By keeping a close eye on Bitcoin (BTC -2.50%), Ethereum (ETH -3.10%), and Ripple (XRP -4.27%) in the second half of 2022, you’ll have a better understanding of the crypto market’s future by 2023.
Ethereum after “the merge”
A massive upgrade is about to take place on the Ethereum blockchain network. “The merge” involves replacing the old Proof-of-Work system with a leaner Proof-of-Stake system. As a result of this upgrade, several fundamental changes will be made to how Ethereum processes transactions in 2023 and beyond.
Unlike Ethereum mining, Ethereum transactions will become cheaper and faster, and the redesigned Ethereum ecosystem should be able to fend off challenges from so-called Ethereum killers.
There is no exact date set for the merger, but it is expected to take place in September. This game-changing platform upgrade needs to be closely monitored by investors. Firstly, the actual change must be implemented without technical glitches.
Next, we’ll see how crypto-based app developers react to the upgraded Ethereum platform, and finally, the upgrade is undoubtedly good news for Ethereum in the long run, but its immediate effects are uncertain.
Vitalik Buterin, the co-founder of Ethereum, estimates the platform will be 55% complete after the merge, leaving plenty of room for enhancements. As Ethereum grows up, whatever happens in September and beyond should provide clues about where Ethereum is going and how market makers will respond.
Bitcoin: a digital replacement for gold?
13 years later, the first cryptocurrency on the market is also the largest. Despite this, Bitcoin still has a long way to go in the global economy.
The price of Bitcoin started at $46,700 per coin in 2022. By mid-May, the price had fallen to $17,700, and the price chart has remained wobbly since then.
Bitcoin investors do not want to see such whimsical volatility. Designed to function as an electronic replacement for cash, Bitcoin provides efficient payment functions and a reliable long-term value store.
Cryptocurrencies may be heading toward these goals, but nobody would call them safe value vaults. Despite the evangelists’ claims, MicroStrategy (MSTR -2.69%) CEO Michael Saylor acknowledges that Bitcoin hasn’t reached its full potential as of yet and that long-term stability won’t arrive until a regulatory framework is put in place.
In the coming months and years, you should watch Bitcoin’s price chart as a barometer of the progress of cryptocurrency regulation. Although this is a global issue, the American market should set the tone for a sensible taxation strategy and a useful rulebook.
Bitcoin will remain volatile until the government and its supporting agencies work out these details. The devil is in the details as the regulatory system develops. Again, Bitcoin’s price movements will indicate how well these efforts are going.
Ripple’s legal issues can set the tone for the whole market
Of course, we cannot forget the Ripple network and its XRP token. As discussed in the Bitcoin section, this discussion is closely related to the regulatory review process.
In December 2020, the Securities and Exchange Commission (SEC) filed a lawsuit against Ripple, alleging some of its executives had offered unregistered digital securities. XRP trades were quickly removed from most crypto exchanges, and legal proceedings are in progress.
A summary judgment will be delivered next week by the District Court of Southern New York. Despite not being the end of the proceedings, this decision should provide some insight into how the courts view several crucial issues.
Is Ripple’s XRP an investable security, as the SEC argues, or just a payment system? Do all cryptocurrencies need to be viewed through the same lens, or should some digital coins have fundamentally different trading and spending rules?
Regardless of what Judge Analisa Torres says in the upcoming summary judgment, her legal opinion will guide industrywide discussions on cryptocurrency trading rules. XRP is at the center of that conversation, hoping to get back into business on American crypto exchanges with full-featured trading. Additionally, the judgment may shake the crypto market’s very foundations, potentially affecting Bitcoin, Ethereum, and other cryptocurrencies.
Cryptocurrency investments are currently determining their long-term future. In the coming years and decades, you will benefit from the lessons you learn from Ripple, Ethereum, and Bitcoin in the second half of 2022.
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