The development of blockchain technologies has been among the most thrilling technology trends over the past few years. A blockchain is a decentralized, digitally distributed public ledger that has demonstrated the potential to spur innovations by addressing inefficiencies and solving real-world problems.
Blockchain is the technology that fosters Bitcoin and other cryptocurrencies. But the overall scope of blockchain technology is much broader. Digital smart contracts stored on a blockchain can transform various sectors, including financial services, supply chains, insurance, logistics, and more.
2021 has been quite eventful for the blockchain and cryptocurrency industry. Regulators in the US discussed how to impartially regulate the stablecoins. The US government claimed that they are not going to ban Bitcoin and other cryptocurrencies. Bitcoin became a legal tender in El Salvador, making crypto an accepted means for exchanging goods and services. These are just a few examples of the many steps taken towards the increased adoption of cryptocurrencies in 2021.
But last year was just a preview of what we expect to see in 2022. Based on the groundwork that has been laid so far, we can foresee six major crypto trends to take note of in 2022. These trends will further speed up the adoption of cryptocurrencies in unprecedented ways.
Since El Salvador has already recognized Bitcoin as legal tender, it’s highly likely that more countries will follow suit and begin integrating crypto into their financial systems.
We are likely to witness the Eurozone come up with its own regulations regarding cryptocurrencies. In September 2020, the European Commission proposed the Markets in Crypto-Assets (MiCA) framework, which was intended to streamline the distributed ledger technology (DLT) and alter the European digital asset landscape for good. It was targeted to be officially adopted in EU legislation by 2024.
As we approach the time for adoption of MiCA across the EU, other jurisdictions across the globe seem eager to allow the regulation of cryptocurrencies in a similar fashion. This incorporation of crypto-related technology into more economies will potentially create a domino effect in the world, which in turn will compel other governments and authorities to also start exploring the benefits of this emerging industry.
In 2021, we observed a plethora of traditional investors and financial institutions enter the crypto space in meaningful ways. In March, Morgan Stanley offered access to Bitcoin funds to its wealth management clients. BlackRock, the world’s largest asset manager, took some steps to get exposure in the cryptocurrency industry by adding Bitcoin features to two of its funds.
We are likely to see more and more traditional financial institutions learn more about the crypto space and start investing in it in 2022. For example, WisdomTree is already planning to launch more crypto offerings this year.
2021 was a significant year for non-fungible tokens (NFTs). The aggregate sales worth of NFTs in the art industry, as of September 2021, summed up to a stupendous $774 million.
Blockchain technologies have enabled us to create art in ways that can never be forged. This means the world is now ready to explore more use cases of blockchain and cryptocurrency, which will help us build a more sustainable world.
2022 could be the year when we see blockchain technologies create more secure and easy-to-manage digital identities for us. That will also allow us to improve the procedures in the healthcare, public policy and finance sectors.
2021 was a great year in terms of clear legislations being created around the crypto industry. In this year, we are likely to witness more jurisdictions aligning on their regulations regarding crypto adoption. This will allow crypto platforms to safely innovate and develop new products. It will also help crypto firms build effective risk management strategies to protect their customers.
Bitcoin, Ethereum and stablecoins can be deposited on cryptocurrency savings accounts to yield high levels of passive income. This process is called crypto staking. The trend of crypto staking will definitely build out further in 2022, as it’s a great way to utilize idle digital assets to earn money.
According to two senior analysts from JPMorgan, crypto staking will gain a lot of traction in 2022, and become a source of income for both retail and institutional investors. The two analysts produced a report that stated staking currently generates an annual revenue of approximately $9 billion.
Once Ethereum 2.0 is released, adoption of crypto staking in the DeFi space will be propelled further. This could raise staking payouts to as high as $20 billion in the months that follow the launch. By 2025, the staking payouts could hit $40 billion.
As more crypto enthusiasts explore the money-making opportunities of crypto staking, organizations are realizing the market potential of developing DeFi staking platforms. Thus in 2022, we are bound to see several new Defi staking platforms emerging in the crypto space.
One example is DeFiato which is a Centralized DeFi (CeDeFi) platform that aims to remove technical barriers to make DeFi accessible to all users, including those with little or no experience. By staking and yield farming on DeFiato, users can grow their crypto holdings and earn passive rewards. This user-friendly platform provides actionable token insights that allow users to make informed decisions regarding their holdings.
With the way things are moving in the cryptocurrency industry, it looks like crypto platforms that maintain proper risk management programs and practice robust compliance will definitely prosper. Cybersecurity, compliance and sound risk management will continue to be the hot topics of discussion throughout this year.
At the same time, the regulatory authorities will continue to make cryptocurrency adoption as safe and secure as possible in their jurisdictions.