2021 has been an extraordinary year for crypto. We saw DeFi swell to a $100+ billion industry , Bitcoin reach a price peak of $69,000 , massive ecosystem growth for layer twos like Arbitrum and alternative chains like Solana , over $22 billion in sales for NFTs, and more mainstream and institutional interest than ever before.
Here are six of my top predictions for how the space will fare in 2022: L2s and Rollups: Rollup scalability platforms built on Ethereum, such as Arbitrum and StarkEx, will continue to gather traction as an immediate and long-term solution for Ethereum’s increasing network congestion.
Non-Ethereum/-Bitcoin Chains: Dapp ecosystems in alternative smart contract blockchains, such as Solana and Binance Smart Chain, will continue to grow as bridges increase cross-chain access to liquidity and developer platforms make it easier to launch dapps on other chains.
Composability & Web3.0: Projects will find new, powerful ways to integrate with one another to create a unified user experience across the online ecosystem. Mechanisms for digital ownership and data management will also expand, allowing for the development of a more robust, high-utility digital identity.
Expansion of NFTs: NFTs will continue to soar in popularity as the digital art ecosystem grows. NFTs will also power several use cases in verticals besides pure images, including gaming, music, and creator/influencer fanbases.
DAOs: More DAOs will launch around unique, fascinating use cases as people increasingly buy into the concept of digital, collective action. Along with the growth of DAOs, we’ll see significant development in tooling for DAO management and operations as DAOs grow more complex in organization and function.
DeFi Security: On the heels of several large DeFi exploits in 2021, security will be a bigger priority than ever for DeFi protocols in 2022. Projects emphasizing runtime security and insurance against smart contract attacks will help secure dapps on various blockchains, increasing mainstream users’ confidence and trust in DeFi as a financial ecosystem.
2021: The Year of Crypto Fever
2021 may have been the most exciting, tumultuous year for crypto yet. We witnessed incredible growth and innovation, including Ethereum’s highly-anticipated London hardfork, the explosive expansion of the Solana ecosystem over the summer, and Bitcoin’s all-time high price of $69,000 in November. Simultaneously, we’ve seen crypto’s inefficiencies and vulnerabilities on full blast, from Ethereum’s ridiculous gas fees to the $600 million exploit of PolyNetwork ’s smart contracts.
What is indisputable is that crypto has captured the public eye like never before. Each day, thousands of users are registering addresses on the blockchain, scouring NFT collections on OpenSea, and investing more capital into DeFi and web3.0. As 2022 begins, I look forward to seeing how this mainstream attention guides the direction and speed of crypto innovation––extending the boundaries of what crypto can accomplish and helping achieve its vision of a decentralized, user-first financial system.
On last year’s predictions:
Here is a review of my predictions from last year . For each prediction, I’ll summarize the key developments in that space in 2021 and provide an accuracy rating to benchmark how well my initial prediction held up, with 1 being the least accurate and 5 being the most accurate.
Growth of Bitcoin: Bitcoin underwent explosive growth in 2021, reaching an all-time high of $69,000, more than double its 2020 all-time high of $28,000. At its peak, BTC hit a market cap of over $1 trillion – a feat that took Apple 42 years to accomplish, Amazon 24 years to accomplish, and Google 21 years to accomplish; in contrast, BTC is barely 12 years old. Adoption grew significantly as well: the first Bitcoin-linked ETF launched on Wall Street in October, institutional investors poured nearly $17 billion into the digital asset, and 34 public companies reported Bitcoin on their balance sheet this year.
With these incredible gains, the asset still continues to experience considerable volatility, reaching a low of $29,807 in June and plummeting nearly 19% in a single day in December. Moreover, it’s important to note that other digital assets, like Ethereum, have also grown immensely in 2021, reducing Bitcoin’s share of the overall crypto market from 70% to 40% .
Nonetheless, it’s clear that Bitcoin remains one of the world’s most valuable assets and continues to demonstrate the tangible value of digital scarcity and decentralization, helping pave the way for all digital assets.
Accuracy: 5
Government Exploration of CBDCs: In 2021, we saw interest from even more central banks around central bank digital currencies (CBDCs). A survey by the Bank of International Settlements […]
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