The financial markets appear to be in for a wild ride this year. There are a lot of developments that IT experts and investors should be on the lookout for, from supply-chain issues to potential regulations on cryptocurrencies and NFTs.
We’ll discuss the biggest current trends in the cryptocurrency industry in this post (in 2022) and those that will probably endure at least through 2025 and even beyond.
Adoption of the Crypto Ecosystem by Institutions
Large organizations and financial institutions have historically had doubts about the cryptocurrency environment.
Numerous institutions are now actively investing capital in this field.
The asset management sector is the one where this is most obvious.
Institutional assets under management totaling $15 billion will have been devoted to the crypto asset class by the end of 2020.
Large financial gatekeepers are facilitating consumer cryptocurrency transactions.
Last year, both Paypal and its affiliate Venmo made it possible to trade cryptocurrencies on their platforms.
According to PayPal data, users who purchased cryptocurrencies using the app logged in twice as often as they did before the company permitted such transactions.
Additionally, in December 2021, the Chicago Mercantile Exchange (CME) debuted Micro Ether future contracts.
Decentralized Finance Grows in Leaps and Bounds
Traditional lending and the production of derivatives are typically both included in DeFi transactions.
And the DeFi industry is just starting to flourish.
Additionally, 2021 saw TVL increase at an unheard-of rate, reaching just about $100 billion at the year’s end.
Yield farming has been one of the most well-liked contemporary DeFi apps.
Yield farming refers to lending cryptocurrency to other platforms in exchange for interest or brand-new coins.
Over the past year, decentralized exchanges (DEXs) have also gained popularity.
DEXs enable direct transactions between crypto owners, and no middleman is required.
Additionally, they provide consumers total control and ownership over their cryptocurrency assets.
On DEXs, the monthly trading volume is steadily increasing.
Non-Fungible Tokens Tokenize Almost Anything
The potential of non-fungible tokens is enormous because they may be used to transfer rights pertaining to both physical and digital property.
Therefore, established institutions like museums and galleries are likely to treat and hold NFTs as their interest grows. In reality, some big businesses and famous people have already begun to embrace NFTs as the future foundation of the virtual economy.
The beauty of the NFT market is that it is comparable to the early days of the internet when numerous new tech businesses rushed to enter the market with their distinct enthusiasm and flare.
Regulations Being Enforced by Governments
The year 2021 saw the crypto sector experience an increase in regulatory clarity.
An era of increased government monitoring began with the ICO mania of 2017.
Additionally, regulators have continued to be perplexed by legal issues pertaining to the nature of cryptocurrencies.
Although the majority of nations have not yet decided whether to regulate or not, this issue is still crucial.
Lack of a framework can stifle continued innovation, which could have a negative effect on the industry.
Fortunately, new ideas like DeFi, NFTs, or even the metaverse will make the industry harder for governments to control.
In fact, it’s likely that legislators will need to concentrate on establishing legal frameworks for initiatives like the metaverse.
Clear rules on what can and cannot be done in virtual reality would help to legitimate efforts since the technology has received global media attention from both fans and skeptics.
The Market for Decentralized Applications Expands
According to DAppRadar, the overall amount of DApp transactions will rise to $271 billion in 2020 from $21 billion in 2019.
On the Ethereum blockchain, a large number of DApps carry out some type of DeFi functionality.
On the Ethereum blockchain, there are currently 2000 DApps active, according to recent estimates.
Over the past few years, the cryptocurrency market has been nearly entirely unpredictable. But one thing is certain: there will still be innovation in this space, and it shows no signs of slowing down.