In 2021, cryptocurrency entered the mainstream.
The celebrity Elon Musk often tweets about it; It was mentioned on the famous TV show Saturday Night Live; The Collins Dictionary chose NFT as the word of the year in 2021.
In 2021, cryptocurrency exchanges flourished.
According to The Block Research, a cryptocurrency research institute, the global cryptocurrency trading volume exceeded $15 trillion as of December 24, nearly seven times more than that of the previous year.
The year 2021 finally ended. In 2022, the crypto world will again welcome new crises and favorable changes.
01 The Year When Cryptocurrency Booms
People seem to welcome a more virtual world.
On Christmas Day this year, the most downloaded app on the Apple App Store in the United States was a VR app: Oculus.
As the software used to connect with the Oculus VR glasses, its success also means that Meta’s (formerly Facebook) VR glasses were popular on Christmas holidays.
In addition to the new popular gift, there are other facts that prove this, such as the cryptocurrency transactions that are seven times higher this year than last year and the fact that Sotheby’s sold more than $100 million in NFTs this year.
According to nonfungible.com, total NFT sales in the past year were about $14.1 billion, compared with $65 million in previous annual sales.
According to the Pew Research Center, about 16% of Americans hold or have held cryptocurrencies. In 2015, that figure was only 1%. According to Crypto.com, the number of people holding cryptocurrencies worldwide has doubled this year to about 220 million people.
Decentralized cryptocurrency exchanges also increased by 858%, but the total was only $1 trillion, accounting for only 6% of all cryptocurrency trading volume.
The cryptocurrency exchange, Coinbase, was successfully listed on NASDAQ in April with a first-day valuation of $86 billion. Venture capitalists are now paying attention to cryptocurrency. According to PitchBook, in the United States alone, VCs invested $7.2 billion in cryptocurrencies in 2021. Globally, the amount of venture capital investment is $29.4 billion.
Cryptocurrencies trended a lot in 2021. Concepts such as NFT, DAO, Metaverse, Web3 have emerged. It is almost a general rule that whoever can predict the right trend will stand at the beginning of a wave, no matter if they were institutional investors, retail traders, or practitioners.
02 The Opportunities and Challenges Face by Exchanges
Recently, a survey commissioned by consulting firm a16z, a venture capital giant, showed that about 45% of all cryptocurrency owners are millennials born in 1980 to 1996.
Web3 has arrived, and various organizations are saying that it will reach 1 billion users in the next five years. Most of these 1 billion users will be millennials born after 1980.
According to Guy Hirsch, managing director of eToro USA, the market is witnessing a shift in trust from traditional stock exchanges to digital currency exchanges for millennials.
The battle between cryptocurrency institutions has turned into a mental battle for the millennials. That is, whoever can win these young people’s hearts will take the lead.
Statistics show that millennials are more inclined to emphasize an investment philosophy that enriches themselves and the world around them. They gravitate towards cryptocurrencies more than the gradually solidifying property and stock markets.
The competitive landscape of cryptocurrency exchanges is not immutable. Selection and prediction of new cryptocurrencies, as well as standardized operations, will be the key indicators to distinguish the quality of cryptocurrency institutions, including exchanges.
In 2020, MEXC took the globally compliant operational route and wanted to be known for its fast, forward-looking arrangement of cryptocurrency types. Two years later, it has achieved results: MEXC is among the top three in global spot trading volume.
Relevant data show that in 2021, the percentage of overseas MEXC users increased to 1100%. The annual growth percentage of transactions exceeded 700%, and overseas users accounted for 70% of the total users.
According to MEXC Research, data sources from CoinGecko, the cryptocurrencies in the top 10 in 2021 all came from projects debuted on MEXC, with the main focus on the Metaverse and blockchain base layer infrastructure. It is clear that choosing the right type of crypto is a very important investment factor.
It is also worth noting that SHIB, which ranked first in gains, is a memecoin. SHIB achieved shocking gains of up to 106,363,536%, surprising everyone with the power of meme culture on the cryptocurrency market.
03 Predicting 2022’s Crypto Landscape
Looking ahead to 2022, what will happen to the cryptocurrency world?
1. More funding than ever.
Since this year, venture capitalist giants including Sequoia Capital, a16z, Coinbase have entered the cryptocurrency world. In June, a16z announced that it would raise $2.2 billion of funds. When adding this with its first two early crypto funding, the total comes up to $825 million. a16z also has more than $3 billion in crypto assets. On November 15, Paradigm announced that it would set up a $2.5 billion cryptocurrency investment fund to bet on the next generation of leading cryptocurrency projects.
In addition, people who are predominantly millennials will bring in coins, and the cryptocurrency world will be richer in 2022.
2. More room for innovation
At the beginning of its development, Ethereum created many innovative modes, such as NFT, DAO, and Chain Games, which are now becoming a reality. Their possibilities are endless.
A large number of DAO teams were set up in the second half of 2021 and raised a large amount of funds to solve the problem of stagnation of development — from project management to loss of staff, slow decision-making, inappropriate capital distribution. Just like how OpenSea suddenly became a major market for NFTs, there will be winners in the DAO space next year.
3. New regulations are coming.
At a hearing on December 8 by the House of Representatives Financial Services Committee, the executives of six cryptocurrency companies, including Coinbase and Circle, called on the US Congress to provide clearer rules for a thriving $3 trillion industry, but they also warned that excessive restrictions would drive the industry overseas.
In October, a16z executives traveled to Washington, DC, to lobby for Web3 regulation. As a policymaker, a16z has been trying to come up with a potential solution for Web3 network regulation.
It is believed that the US government’s rules governing cryptocurrencies will be clear by 2022. Globally, cryptocurrency exchanges and institutions that operate in compliance have a greater chance of successful companies.
Recently, Catherine Wood, the founder of the Ark Invest Foundation, released a summary at the end of the year and an outlook for the future. Different from the period of the Internet bubble that people were worried about before: (1) Technology enterprises have real market demand now, and it’s not just a concept; (2) Investors have attached great importance to the possible risks. Therefore, over a five-year investment period, Ark will pay 3–5 times more investment in five areas of future interest: DNA sequencing, robotics, energy storage, artificial intelligence, and blockchain technology.
In any case, 2022 will be another amazing year. No matter what happens in the market, cryptocurrencies will continue to improve and move towards the inevitable future of the world.