The global crypto adoption has increased by 880% in 2021.
Based on the Chainalysis report global crypto adoption has increased by 880% in 2021.
NFT utility and metaverse development is likely to continue its trend in 2022.
More crypto regulations like stablecoin regulations, accepting BTC as legal tender, CBDC launch can be expected to increase this year.
Web3.0 and DeFi 2.0 are some of the most awaited developments in the crypto industry this year.
The cryptocurrency market has surged incredibly in 2021. Though it was a roller coaster ride considering the market prices, the crypto mainstream adoption and awareness have never been so clear. Several announcements like massive institutional investments and El Salvador’s Bitcoin adoption played a huge role in the adoption of Bitcoin last year. The world witnessed the widespread adoption of cryptocurrency by various countries along with active attempts made by other nations to regulate digital currencies.
Based on a report published by Chainalysis, global crypto adoption has significantly increased by 880% in 2021. Considering the outstanding growth of cryptocurrency in 2021, we will see some promising crypto trends that have the potential to rise significantly in 2022 in this article.
Non Fungible tokens such as Crypto Punks, Bored Ape Yacht Club were a huge hit last year. NFTs were initially believed as a bubble but they have grown remarkably in terms of popularity and finding acceptance from the crypto community. According to a report by DappRadar, the NFT space experienced one of the most impressive expansions in 2021 and generated over $23 billion in trades.
Notably, many popular brands like Adidas, Nike, Pepsi have launched their NFT collections at the end of last year. Though the value of an NFT lies in the fact that it is non-fungible and indivisible, there is a growing need for making NFTs usable in different ways. On top of their scarcity and collectibility, the utility creates a different kind of value proposition for NFTs. If we combine DeFi with NFTs, NFT staking or farming gives them a passive yield-generating utility. On the other hand, the redeemability of NFTs is another form of NFT utility where holders can exchange NFT for another digital or physical good.
One of the biggest moves for NFTs and especially for metaverse space has been the announcement of Facebook’s rebranding to Meta in October 2021. Following the announcement, more than $100 million worth of Metaverse lands were sold in one week during November 2021 based on a DappRadar report. Metaverse and the concept of virtual real estate is the next big hit in the cryptocurrency space without a doubt.
Following the huge virtual real estate boom, 2022 is poised to be one of the biggest years for the metaverse. With the rise of Sandbox, gaming companies are likely to invest in metaverse to expand their user base and create a worldwide community. Big tech companies such as Apple, Microsoft, and Google along with Meta are gearing up to release hardware products and software services to open up a new market by transporting their users to imaginary worlds.
The next generation of the internet, web3.0 is likely to start taking shape in 2022. The creator economy has been booming for the past couple of years and web3 development has only accelerated the trend. Though the new iteration of the internet is still in the early stages, it is enabling an incredible amount of new innovation in the creator economy. The development of web 3.0 has begun in 2021 and cloud technology, artificial intelligence are some of the most prevalent forms of web 3.0 today.
A massive amount of institutional investments is one of the biggest trends of the crypto industry in 2021. Microstrategy CEO Michael Saylor has been acquiring and hodling Bitcoins reportedly. In December 2021, Microstrategy purchased 1,914 Bitcoins additionally for more than $94 million. The company holds a substantial 124,391 Bitcoins worth roughly $6 billion, representing more than $2.1 billion in gains.
While appearing in an interview with Real Vision CEO Raoul Pal, Saylor stated that “this is not a speculation, nor a hedge. It is a deliberate corporate strategy to adopt the Bitcoin standard”. It is well-known that EV manufacturing company, Tesla held roughly 43,200 BTC worth $2.5 billion as of October 2021. There is growing confidence in cryptocurrency as an asset class. So, the trend of institutional investments is likely to continue in 2022 as well.
More crypto regulations
From China’s clampdown on crypto to El Salvador’s adoption of Bitcoin as a legal tender, governments of all the countries on the globe can no longer ignore cryptocurrencies. They are forced to regulate virtual currencies as the industry has already acquired mainstream adoption. Governments are likely to focus on three major areas of crypto regulation - Stablecoin regulation, Crypto regulation, central bank digital currencies (CBDCs). Governments are incessantly finding ways on how to increase investor protection without banning the entire industry. Countries such as China, Japan, Russia, the United States, and the UK are planning to launch Central bank digital currencies. Considering the number of countries focusing on the crypto industry, we are likely to see more regulation on digital currencies.
For the last two years, decentralized finance (DeFi) has been rising in adoption. Decentralized applications (Dapps) like Uniswap have grown in popularity by allowing users to earn passive income from automated market making, staking, and lending. However, there is a need to improve several decentralized protocols which struggle with scalability, liquidity, and accessibility to information. If DeFi 2.0 becomes successful, it can help reduce the risk and complications involved in crypto usage.
According to Statista, the DeFi TVL (total value locked) increased appreciably by 100 million US dollars in 2021. Some of the most significant projects are Curve, Aave, Compound, MakerDAO, Yearn Finance. Though DeFi space is increasing rapidly, it is still complicated for most users. Upcoming DeFi 2.0 projects are likely to grow to their full potential this year so that the primary issues of DeFi 1.0 will be solved.
Seems to be an exciting year for crypto
Even though all these developments do not happen at the same time, there is a high chance that these crypto trends are going to increase in popularity in 2022. Following one of the biggest successful years of cryptocurrency, 2021, this year is also going to be an exciting year for the crypto space.