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2022 has been a bumpy year for the crypto industry as the Fed rate hike and the cryptocurrency market fell.In recent years, the epidemic has accelerated digitization and has driven the adoption of cryptocurrencies in various areas.The addition of traditional companies such as PayPal is also an important driver of the increased adoption of cryptocurrencies, enabling people in the Western world to trade crypto assets and allowing consumers to buy goods in cryptocurrencies at mainstream companies such as AT & T, Pizza Hut and AMC Theater.However, the path to the crypto industry remains uncertain, and western regulators are shifting the rules of traditional financial institutions to the emerging cryptocurrency sector.As the crypto industry enters 2022, some trends and activities will continue, but they will face more challenges and opportunities in the future.

The Evolution of the Western regulatory environment

First, the Financial Action Task Force (FATF) rules, currently being enacted globally, have become the biggest regulatory challenge for the crypto ecosystem in 2022.The rule requires the collection of cryptocurrency transfer personnel and transfer amounts, and the sharing of transaction data requires not only close cooperation between countries, but also between companies, platforms and individuals.

Another legislative document that will play an important role in 2022 is the crypto Asset Market (MiCA) proposed by the European Commission, aiming to simplify EU regulation of distributed ledger technology and virtual assets.Although the draft rules have been published since the end of 2020, the MiCA will transition to EU law as early as this year, so the crypto community in Europe is closely monitoring its progress.This is important for the competitiveness of the European Union in the global crypto market, and it has the potential to create a good competitive environment to cultivate more crypto industry players and innovative talents in Europe.

Stability and isolated island issues need to be addressed

The ETH 2.0 upgrade will make the Ethereum network more scalable, secure, and sustainable, which is important for the long-term success of the Ethereum network.Other L1 protocols are also gaining attention, such as Solana, Polkadot, Avalanche, Cosmos, Near, and Flow, among others.

Another important trend in 2022 is the integration of encryption services into the legacy stack of traditional European and American banks.The crypto industry and traditional banks form two different islands.To facilitate the flow of institutional capital, it is crucial that the two islands seek cooperation and start two-way integration.One of the drivers of this convergence demand is the increased institutional demand for digital assets.2022 will also be an important year for NFT. Strong interest in NFT increases the number of related services, only if they need to be seamlessly integrated into existing platforms.

Institutional investors will reduce market volatility

Cryptocurrencies are increasingly becoming potential options due to increasing economic pressure to find cash alternatives and generate gains.Institutional investors focused on cryptocurrencies, such as hedge funds, asset managers and VC, have diversified their portfolios through digital assets, and traditional asset managers and family offices will gradually join them.Driven by negative interest rates, inflation hedging and emerging markets, more users will really start to know about cryptocurrencies.

In 2022, more institutional funds will enter the crypto ecosystem directly or through indirect instruments (such as ETP, ETF and other financial instruments involving crypto but not direct investment) in 2022.These investors will find low opportunities to build positions, which will objectively reduce price volatility in mainstream crypto assets such as Bitcoin Ethereum and help stabilize the market.This year will also see growing interest among institutional investors in NFT, with NFT trading is largely limited to retail investors.As the hype bubble fades, institutions will also focus on the NFT types of true precipitation value.

Crypto industry talent exploration and outlook

The crypto ecosystem is growing at an alarming rate, and demand for talent is outpacing supply.In the United States, demand for cryptocurrency-related jobs has increased by 395 percent, according to a new report by Linkedin. Companies can no longer rely on hiring from the crypto community, and the biggest challenge for innovative companies in 2022 will be how to attract applicants outside of crypto. HR will focus on applicant skills that can be transferred from other industries, as it becomes increasingly difficult to limit the search to cryptocurrency-centric businesses.According to relevant statistics, employees at large technology companies in Europe and the United States have flocked to companies related to the crypto industry.

Bitcoin's anti-risk attributes to enhance

While the crypto industry was struggling at the beginning of this year, it did not necessarily follow a unilateral downward trend like the bear 2018 market.Inflation concerns will continue to push investors to use Bitcoin as a hedge against inflation.In addition, the benefits of cryptocurrencies to corporate coffers, including the ability to transfer money quickly and cheaply around the world, will continue to be attractive.

A series of economic sanctions triggered by the Russo-Ukraine war taught people a lesson around the world. ——, the French currency could depreciate by 30% overnight, the bottom line of "sacred private assets" could be easily broken, and the private overseas assets of sanctioned countries may be forcibly occupied at any time due to nationality issues.Although the price of crypto assets fluctuates greatly, as long as you have the private key and manage the wallet well, you can at least ensure that your personal assets are not violated by the centralized power.As the awareness of private asset protection awakens, this anti-risk attribute of cryptocurrencies will be further enhanced.

The crypto industry has been tested by many storms in recent years and is doing better at maintaining resilience, highlighting the strong interdependence among players in the field.Finally, from the long-term sustainability of the entire ecosystem, the crypto industry is still in its early adoption stage, and will continue to confront and adapt with centralized institutions, and will face more challenges and opportunities in the next few years.

*The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of SparkDAO. Every investment and trading move involves risk, you should conduct your own research when making a decision.