2021 has been a big year for cryptocurrencies: the crypto market has experienced the surge of Decentralized Finance (DeFi) and increased interest among institutional investors; Bitcoin has become a legal tender for the first time; the world’s first crypto ETF has been launched. Also, it was the finest hour for meme coins like Shiba Inu, smart contract platforms such as Cardano, and utility tokens, including Basic Attention Token. A lot of people have been searching where to purchase Basic Attention Token (BAT) and a lot of other altcoins, so many of them have updated their all-time highs.
Many experts expect that 2022 could become an even bigger year for various crypto-related projects. Here are some sectors that may see a surge in 2022, taking into account the achievements of 2021.
Metaverse became one of the main buzzwords in 2021. The concept of the metaverse burst into the mainstream. Although metaverse games and projects were around for many years, many people started figuring out about this concept after Facebook decided to change its name to Meta.
The crypto market provided significant support to the Metaverse concept. Projects like Decentraland and Sandbox saw skyrocketing growth in 2021 because a lot of blockchain and traditional companies joined the metaverse. For example, there is an area in Decentraland called Fashion District where users can buy virtual clothes from real brands like Prada, Gucci, and Ralph Lauren. Some metaverse enthusiasts claim that every Fortune 500 company needs to think about its metaverse strategy.
Many companies just “discovered” metaverse in 2021, so 2022 could become a year it might go mainstream. If they see increased interest and value in this field, they may launch their own projects.
NFT has become the word of the year, according to Collins Dictionary. And it’s not surprising because, for many people, non-fungible tokens came out of nowhere and rapidly attracted people’s attention. NFTs finished 2021 with a total sales volume of over $12 billion. Some remarkable sales from the $69 million Beeple’s NFT sale on Christie’s auction to numerous multimillion-dollar sales of Bored Ape and CryptoPunk NFTs led the way. But still, the market was flooded with NFTs on different networks since many companies and celebrities joined the hype and started selling their own NFTs.
At the moment, NFT euphoria is fading, but the technology is here to stay. Traditional companies may start using NFT to feature in everything from sports tickets to limited virtual sneakers in the metaverse.
NFT is surrounded by multiple legal, accounting, and tax questions that are far from being answered properly. According to a PwC survey, only 7% of authorities globally provide tax guidance on NFTs. If 2022 becomes a year when authorities bring some clarity to the space, then many companies may consider launching their own NFT projects. If NFT platforms see sustained demand from companies and retail investors, they could create their own utility tokens to expand user experience, just like crypto exchanges did not so long ago.
The convergence of decentralized finance, metaverse, and NFTs could lead us to the new Web 3 ecosystem, where crypto may become the main option to transfer value. And gaming has become a large catalyst for these three sectors in 2021. For example, Axie Infinity’s decentralized play-to-earn model gained the project over 2 million active players. It helped its native token AXS rapidly reach the top 30 cryptocurrencies by market capitalization.
Numerous gaming-focused blockchain funds keep popping up, and it can give a boost for decentralized gaming projects in 2022. For example, Solana’s $150 million gaming fund.
Some traditional gaming players also experiment with NFTs and various crypto solutions for their audience. For example, French game developer and publisher Ubisoft recently launched its Quartz platform to provide in-game cosmetics as NFTs on Tezos blockchain. There are more than 2.5 billion gamers around the world and the traditional gaming companies only started discovering the possibilities of decentralized gaming. It means that a lot of projects in this field may be launched in 2022.
CBDC and adoption of established cryptocurrencies
In 2021, El Salvador became the first country in the world to legislate bitcoin as legal tender. According to El Salvador’s President Nayib Bukele, more people in the country have a bitcoin wallet than a bank account. Local businesses have also adapted to the new reality, accepting payments in bitcoin and running crypto-related projects.
Some politicians in overdollarized and developing countries like Panama or Paraguay also consider following El Salvador’s approach to recognizing cryptocurrencies as legal tender. Others are more interested in launching its own digital currencies. For example, Palau announced its government-backed stablecoin, while Marshall Islands is looking at introducing so-called central bank digital currency (CBDC).
In 2021, there were a lot of grou n ndbreaking CBDC projects, from The Bahamas sand dollar and Nigeria’s eNaira to Singapore’s project Dunbar and Hong Kong’s mCBDC bridge. But interest in local digital currencies goes beyond emerging markets. China is going to launch its e-CNY in 2022. The country has already finished its pilot program, processing around $9.7 billion in e-CNY transactions. e-CNY wallet has been launched over 140 million times by Chinese residents.
In 2021, the crypto market reached many milestones, making this year historic for crypto. And the crypto boom in 2021 could become a foundation for further development of existing projects and inspiration for new crypto solutions. The above sectors made their mark in 2021, and investors should keep a close eye on what to come there in 2022.