2021 has undoubtedly been a historic year, as the total cryptocurrency market capitalization has risen from about $ 800 billion to $ 2.2 trillion. However, 2021 was not only interesting in terms of price, as many epoch-making events and trends took place during the year. In this article, we discuss the top 5 events of the past year and the 5 aspects that need to be addressed in 2022.
Most likely it was the cryptocurrency trend of the year. However, this trend was more speculative than the cryptocurrency market itself. However, we have more cases of using NFT as a stream of music Shocking forecasts for 2022, it’s just a matter of time.
In our opinion, this is the biggest event of the last year and is irreversible in terms of regulation and the seriousness of the market from the outside. Coinbase is making its debut on the stock exchange showed that industry, firstly, should no longer be overlooked and secondly, more importantly, no longer overlooked.
The supply of stabilized currencies increased by 421% from $ 29 billion to $ 151 billion. Stable currencies form the basis of the cryptocurrency economy and decentralized finance. A significant increase in the stabilization of currencies indicates an increase in interest in these products.
Surprisingly, there were only a few regulatory surprises, such as the US infrastructure bill, the adoption of bitcoin as a legal tender in El Salvador, and the banning of cryptocurrencies in China. Everything else was simple and should not be a shock to any cryptocurrency supporter, as they gradually became accustomed to the majority.
VC in the cryptocurrency market:
Funds in 2021 venture capital invested That’s a record $ 30 billion turned into a $ 8 billion 2018 record by turning into cryptocurrency companies. This naturally proves a hot market, but at the same time demonstrates the growing diversity of cryptocurrency companies that attract money. venture capital in this area, ie exchanges and brokers, as well as decentralized financial platforms, NFT platforms, cryptocurrency games, etc.
The long-awaited update for ethereum, the second-largest cryptocurrency, is expected to come in the first or second quarter under the name ETH 2.0. However, you should be prepared that this may not happen in the third or even fourth quarter, as the Ethereum Foundation and its developers are known for postponing dates. In short, ETH 2.0 will turn Ethereum into a more expandable, secure and sustainable cryptocurrency. The latter is extremely important as a protocol proof of workbitcoin and ethereum, which are the current consensus mechanism, probably have no future. This protocol is known to use a lot of electricity because it checks many server operations around the world. It is simply too easy to regulate this industry strictly based solely on environmental arguments, when there are good reasons for businesses to stay away from it until the industry is more environmentally friendly.
Circle and special purpose company:
Circle, the issuer of the second largest USDC stable currency with a turnover of $ 43 billion, has been transformed into a special purpose procurement company (SPAC). special purpose procurement company) The US Securities and Exchange Commission has reportedly postponed it due to concerns about currency stabilization. The operation is expected to take place in 2022, although it was previously expected to take place at the end of 2021. Be aware of the large increase in the supply of stabilized currencies and their overall importance in the cryptocurrency market. The impact of creating this SPV can be somewhat compared to Coinbase’s IPO – if it does, of course.
Although there are only a few surprises in 2021, regulation is always something you should pay attention to. The regulatory approach changes daily, so there are no guarantees for 2022.
For example, although bitcoin and ethereum are first-class cryptocurrencies with their own settlement layer, you can increase their scale by building second-tier or separate solutions called L2 on them. Layer 2). L2 is really needed, as it is expected that cryptocurrencies will be able to expand indefinitely in the future in order to deploy cryptocurrencies globally and turn the digital age into a settlement layer. In 2021, L2 began to gain importance, but it is likely that in 2022 it will become a strong part of the cryptocurrency market and will finally prove that cryptocurrencies can be scaled.
Change in leadership position:
In a way, it’s a cliché. However, because it is still very relevant ethereum will beat bitcoin In terms of market capitalization, this will change the mood in the cryptocurrency market. Presumably, as ethereum catches up with bitcoin in 2021, thanks to more original uses and growing popularity, we are approaching the highest probability of this happening. However, whether this happens depends on the institutional implementation of individual cryptocurrencies, decentralized finance, stabilized currencies, NFT, increasing competition, especially against ethereum, and most importantly, how ETH 2.0 works.
More cryptocurrency market analysis is available here.
Mads Eberhardt, Saxo Bank’s cryptocurrency market analyst