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2021 is coming to an end, if there is a way to describe the performance of the cryptocurrency industry in the past 12 months, it will be huge growth.
The major cryptocurrencies have broken previous records, their adoption rates have increased, new industries have sprouted, and new blockchain use cases have made major breakthroughs.
The latest version of Market Insight reviews the events covered in past questions and in-depth topics in Cointelegraph Research industry reports.
DeFi and altcoins
The two largest increases in 2021 are Solana (Sol) And Earth (Luna). SOL rose 9,500%, while LUNA rose 13,000%. A large amount of investment and the growth of the ecosystem have contributed to the huge benefits of these two tokens. One can also argue that The two are called potential “Ethereum killers” Participated in their large-scale gathering.
In the Decentralized Finance (DeFi) scenario, these two tokens rank among the top five in the total value lock (TVL). Solana ranks 5th with 11.45 billion USD, LUNA recently surpassed Binance Coin (Bitcoin) According to Defi Llama, it ranks second with $18.9 billion. In addition, the emerging ecosystems of Solana and Terra are worthy of in-depth study, which is why they are the subject of upcoming reports from Cointelegraph Research.
There is no doubt that Ethereum’s competition has intensified. According to data from Defi Llama, its TVL share in January was 97%, but it has now fallen to 62.54%. The next stage of the industry’s development is being questioned in 2022, especially because the growth of DeFi this year is so great that the authorities have shifted from denying the industry to trying to find a way to deal with it.
DeFi market capitalization is still a small part of the overall cryptocurrency market capitalization, but it has experienced the same growth trajectory.Some people think that integration with traditional banking may be one of them The main focus of DeFi in 2022.
NFT
Although it has existed since 2014, non-fungible tokens (NFT) made a breakthrough in 2021. Most of the sales occurred in the past 12 months, with more than $14 billion in December.Digital art collections and digital collections account for 91% of these sales, which is one of the key figures disclose In this report.
The sales in the first half of the year were mainly due to individual artists joining the space with their own series and some high-profile sales, while the second half of the year brought more mainstream brands.
For example, Coca-Cola Sale of wearable bubble jacket skins in Decentraland, And visa Purchased its first NFT. The participation of these brands has allowed the NFT market to flourish. The report also revealed that the most profitable NFT collection in 2021 is “CryptoPunks”. Compared with other popular series of NFTs such as “CryptoKitties” and “Bored Ape Yacht Club”, “CryptoPunk” NFT provides a better historical average return on investment.
NFT has also disrupted the gaming industry and has become the key to fully realize the concept of meta universe through its blockchain features.However, there are also critics who doubt Parabolic surge in 2021 It will play a role in 2022, especially in the context of stricter regulatory review.
Nevertheless, the amount of venture capital investment flowing into NFT companies this year is very substantial. As of the third quarter, NFT funds in 2021 had reached 2.1 billion U.S. dollars, but nearly 40% of venture capital transaction activities involved only one company of Andreessen Horowitz. according to To PitchBook. Therefore, as NFT sales and interest continue to grow, companies eager for high growth potential may find it difficult to resist NFT.
Regulation
Progress has been made in cryptocurrency regulation in 2021. The 117th US Congress proposed 35 bills, focusing on cryptocurrency regulation, blockchain policy, and central bank digital currency. Federal Reserve Chairman Jerome Powell’s comments Cryptocurrency will not pose a major threat to the stability of the US financial market. However, one discussion that may arise next year is the regulation of stablecoins.
Presidential Financial Markets Working Group statement In a report, stablecoins may be a useful alternative payment method, but are “subject to proper supervision.” At present, although the market value of stablecoins has exceeded 162 billion US dollars at the time of writing, there is no regulation of stablecoins, but a bill proposed by Senator Cynthia Lummis of Wyoming may be in this direction A step forward.
Lummis plan Comprehensive bill introduced in 2022 This will provide regulatory clarity for stablecoins, guide regulators around asset classes and provide consumer protection. Cryptocurrency regulation will become a topic in 2022, and it will also be a topic for further research by the Cointelegraph research team.
games website
Almost certainly, everyone in the field agrees that Axie Infinity has completely changed the game. The money-making model of playing games is very popular because it increases the real income potential of playing video games.data show In terms of connected, unique, and active wallet addresses, how decentralized applications (DApps) earned through games will dominate in the second half of 2021.Since September, the revenue of game tokens such as Sandbox (SAND), Axie Infinity (AXS), Enjin (ENJ), Illuvium (ILV) and Ultra (UOS) has even surpassed that of Bitcoin because Revealed in the previous issue of this newsletter.
The gaming industry is at the helm of DeFi, with the most connected addresses in the first seven months of this year. These two DApp categories gave birth to a new field, GameFi, which is considered to be the next logical step in the development of blockchain. Encryption-based games have enabled users to control their game assets through NFT, but the elements of DeFi can take it to another level. Incorporating DeFi means that users can use functions such as mortgages, in which they can gain interest in tokens.
However, the industry is still in its early stages, but its appeal lies in its appeal to users who are not necessarily cryptocurrency holders. Attracting such users can further promote more cryptocurrency adoption, which is likely to be the focus of GameFi in 2022.
use
With the development of 2021, cryptocurrency can attract a wider audience compared to the previous year. Data from Chainalysis shows that in the second quarter alone, the global adoption rate has increased by 880% since 2020. The key events mentioned above may be the factors that prompted cryptocurrencies to become more mainstream. The aforementioned NFT venture capital activities accounted for only 7% of the 30 billion USD fall Enter encryption-related investments in 2021.
However, despite the obvious growth, the ownership of cryptocurrencies is still relatively low. TripleA estimates that the global cryptocurrency ownership rate averages 3.9%. Ukraine, Russia, and Venezuela are the top countries, with at least 10% of the population owning cryptocurrencies.
Low ownership rate mean Huge room for growth, which is why the 60.8% compound annual growth rate of the cryptocurrency market from 2021 to 2026 may have some advantages. This year, the value of the cryptocurrency market has grown from last year’s 364.5 billion U.S. dollars to more than 2.5 trillion U.S. dollars-an increase of 586%. In the coming year, GameFi’s new areas and Web3-related assets may become new ways of continuous growth.
The tokenization of certain securities may also occur on a larger scale, even Expected to become the norm by 2030In addition, the popularity of cryptocurrencies for payment may also be another area with untapped potential, which will be further explored in another upcoming report.
It will be difficult, if not impossible, to predict which industries are expected to achieve the same breakthroughs as NFT this year in 2022. However, careful study and in-depth study of reports on certain topics will provide a better way to understand the nuances of a particular department.
Cointelegraph’s Market Insights Newsletter shared our understanding of the fundamentals driving the development of the digital asset market. The newsletter delves into the latest data on social media sentiment, on-chain indicators and derivatives.
We also reviewed the most important news in the industry, including mergers and acquisitions, changes in the regulatory environment, and enterprise blockchain integration. Register now to be the first to receive these insights. All past versions of Market Insights can also be found on Cointelegraph.com.
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