2021 was a rollercoaster for crypto assets.
We saw the market take a big leap towards maturity as trends such as non-fungible tokens (NFTs) and the metaverse gained momentum, and regulators contended with the asset class’s growing role in the global economy.
It’s reasonable to believe that more change can be expected in the year ahead, with the crypto market hitting maturity amidst a changing macro environment and red hot inflation readings.
Here is what you should be watching for as we move into 2022.
1. NFTs move beyond JPEGs
Non-fungible tokens (NFTs) hit the mainstream in 2021. Brand names from Adidas to Budweiser and Pepsi to Warner Bros issued their own collections, sports fans rushed to buy tokenized cards for their teams on platforms such as Chiliz, and luxury fashion houses, including Givenchy, dropped tokens to heighten exclusivity.
All of this demonstrated the revolutionary potential of the “NFT” — which was proclaimed Collin’s Dictionary’s word of the year.
Into 2022, NFTs are set to move beyond just collectible JPEGs. The NFL is now working with Polygon to use NFTs for ticketing, TikTok has released trending videos as NFTs, and a diverse range of companies are starting to use the unique tokens to power radical change in how products are funded, licensed, and promoted.
2. Blockchain gaming and metaverse boom
2021 saw the rise of a younger, faster generation of blockchains, which offer the high performance needed for sophisticated blockchain-based gaming. Meanwhile, the first crypto games hit the big time, and venture capitalists committed billions to making the metaverse a reality.
This sector of the market is primed to hit the mainstream. All we are waiting for is the catalyst of a high-quality game or social platform that can bring in a broad audience beyond just crypto enthusiasts.
3. Layer 2s steal the limelight
The popularity of decentralized finance (DeFi) and NFTs have created bottlenecks on respective blockchains, with congestion pushing network fees to all-time highs.
Against this backdrop, Layer 2 scaling solutions have experienced epic growth by offering faster speeds and lower fees with no compromise to decentralization or security.
This trend is set to accelerate in 2022, boosted by new cryptographic innovations — like Optimistic Rollups and Zero-Knowledge Rollups — that are finally ready for action after years of development.
4. Crypto payments hit the mainstream
2021 showed that payment giants see crypto not as a threat, but as an opportunity: Visa launched a crypto advisory service, Mastercard introduced crypto support, and WhatsApp began testing crypto payments via the Novi wallet.
Governments have seen the potential of crypto payments, too. El Salvador claimed to be saving $400 million a year in Western Union fees by using Bitcoin remittances, and a parallel government in Myanmar adopted Tether as an official currency.
These events could be the first signs of a global transformation in payments and remittances; one that may gain momentum in 2022 as more organizations realize that money can be exchanged instantly and inexpensively — as easily as sending an email.
5. Even more regulatory scrutiny
With former blockchain professor Gary Gensler leading the charge at the U.S. Securities and Exchange Commission (SEC), authorities around the world are racing to roll out regulatory frameworks.
In the US, regulators are discussing a “crypto sprint” to quickly bring the industry into line, while across the Atlantic, the European Union’s (EU) proposed regulatory framework — Markets in Crypto Assets (MiCA) — is close to becoming law.
This activity will likely mean more scrutiny than ever before for the digital asset ecosystem, but if the approval of multiple crypto-themed ETFs around the world and the positivity of the recent US congressional crypto hearing are any indication, then 2022 could be the year we see regulators cautiously embrace crypto assets.
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