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Experts are divided on where the crypto market will go in 2022, with fans saying the digital asset is the future of finance, and skeptics insisting it's a bubble ready to burst.

But there's one thing they can all agree on: We'll all still be talking about crypto next year.

2021 was a busy year for the market, with crypto's overall value skyrocketing as high as $3 trillion. Popular cryptos like Bitcoin and Ethereum continued to hit record highs. Meme coins like Dogecoin and Shiba Inu captured the internet's attention — Dogecoin even saw a surge as high as 400% in one week thanks to online hype. Meanwhile, the crypto exchange CoinBase became the first major cryptocurrency company to list its shares on the U.S. stock market, and financial regulators started to take a closer look at digital currency.

The crypto boom doesn’t seem to be subsiding in 2022. Here are five expert predictions.

More financial advisors will embrace crypto

Financial advisors have been in a tough spot when it comes to cryptocurrency. Thanks to the lack of regulation around digital currencies from the Securities and Exchange Commission and Financial Industry Regulatory Authority, advisors don’t have the guidance they usually want before making recommendations to clients. But that doesn’t mean their clients aren’t asking: a Financial Planning Association’s (FPA) survey published in June found that nearly half of advisors said clients asked about the asset in the last six months, compared to 17% in 2020.

Three years ago, financial advisors were very hesitant about crypto and were discouraging their clients from buying the risky asset at all, says Ben Cruikshank, head of Flourish, a fintech platform designed for investment advisors that recently launched a cryptocurrency offering.

Times have changed. Six months ago, the overwhelming interest from advisors was in Bitcoin only. Now, virtually every firm Flourish speaks to is interested in Bitcoin and Ethereum, Cruikshank says.

“Advisors are finally giving this space the attention it deserves,” he adds. “They really can’t afford to wait any longer.”

We’re going to see new regulation

Of course, something that would make approaching cryptocurrency easier for financial advisors is more regulation — and experts are expecting we’ll see that, too.

Financial regulators will issue a batch of new regulations and enforcement actions, which will cause frustration but should eventually drive crypto further into the mainstream, says Patrick Haggerty, director at Klaros Group, a financial services advisory and investment firm.

Securities regulation has always been a huge question mark in the crypto space, since it’s not even clear if crypto should be treated as a commodity, a security or something completely different. Whether or not we’ll get clarity there is still up in the air, but the SEC has an aggressive stance and they’ll likely develop clarity through enforcement rather than issuing a clear roadmap for people, Haggerty says.

DeFi — or decentralized finance, which refers to a variety of financial products that can be accessed directly via a blockchain network versus traditional intermediaries like banks — is a whole other ball game. In many ways, DeFi reflects traditional financial systems, but does so without the regulation that traditional finance systems have to face.

One aspect of regulation here could be stablecoins, coins that have their values tied to an outside asset like gold, which many DeFi applications are based on. Regulators may determine what a stablecoin issuer needs to do to call itself a stablecoin, Haggerty says.

More women will become crypto investors

The profile of the typical crypto investor will evolve significantly in 2022, Franck Kengne, lead product manager at the cryptocurrency exchange Gemini told Money via email.

The average cryptocurrency owner is a 38-year-old male making approximately $111,000 a year, but that’s due to change, according to Gemini's 2021 State of the U.S. Crypto Report. Nearly two-thirds of U.S adults are crypto-curious — as in, they don’t own crypto but are interested in learning more or holding digital assets soon — and 53% of those people are women. Currently, just 26% of current crypto holders are women, the study found.

If the investors interested in crypto actually take action, the demographics of crypto investors could significantly shift.

This broadening of the investor base into the mainstream is mirrored in established companies like Paypal, Expedia and Microsoft allowing for bitcoin transactions, Kengne adds.

More major retailers will begin accepting crypto

This year, we saw more companies join the growing list of businesses that have begun accepting crypto as a form of payment. The movie theater chain AMC, for example, announced it would start accepting ether, bitcoin cash and litecoin in addition to bitcoin for ticket purchases.

Meanwhile, retailers like Amazon and Walmart are hiring blockchain and crypto experts to develop their digital currency strategies.

2022 could be the year when paying with crypto becomes real, says Sung Choi, vice president of business development at Coinme, the digital currency exchange that partners with Coinstar to bring ATM-like Bitcoin kiosks to retailers like Walmart. That's in part because consumers, especially millennials and Gen Z are living more digital lives, and may have crypto they'd be happy to spend, he adds.

Eliminating credit card and debit card charges can really make a difference for a retailer, so more may be tempted to go the route of accepting crypto, Sung says.

But of course, there are risks. As Deloitte points out, companies may need to enlist a third-party vendor to help with the transactions, and those will charge a fee of their own. Businesses also need to keep very careful track of the value of a crypto during transactions for tax purposes — a potentially challenging task, since cryptocurrency is so volatile.

The crypto bubble will begin deflating

Not everyone is convinced that crypto is the future of finance.

“It’s a modern day tulip mania,” says Robert Johnson, professor of finance at the Heider College of Business at Creighton University.

Tulip mania refers to when a Dutch society became frenzied around exotic tulip bulbs and spent tons of money buying them up with hopes they could then sell them, and is often used to describe speculative assets. David Booth, founder of Dimensional Fund Advisors, also compared Bitcoin to the tulip bulbs when Money interviewed him earlier this year.

2022 will be the year the crypto bubble starts to deflate, Johnson says. The Federal Reserve has indicated that it will start to tighten federal policy, and tightening tends to hit the most speculative markets first. Crypto is most certainly a speculative asset, he adds.

And cryptocurrency doesn’t have intrinsic value like a stock does, Johnson says.

“People tend to fall in love with the bright, shiny new object and kind of forget that what makes something an investment is an asset’s intrinsic value,” Johnson says.

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