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Crypto Adoption in 2022: What to Expect?

Crypto Adoption in 2022: What to Expect?
  • More institutions are expected to adopt BTC as an investment vehicle and inflation hedge.
  • Future adoption of bitcoin as legal tender depends quite heavily on El Salvador.
  • Many governments may move more towards CBDCs in 2022.
  • The use of crypto for payments is expected to gain further momentum in 2022.

The crypto market is having a strong end to 2021, with various cryptoassets — including bitcoin (BTC) — hitting new all-time highs. The question is: will we continue seeing increasing adoption of cryptocurrencies among investors, institutions, and even governments next year?

For most analysts and observers, 2022 will indeed be yet another year of increasing adoption of cryptocurrency, both in terms of its potential as an investment vehicle and inflation hedge, and also in terms of its utility for payments.

Of course, 2022 will not all be plain sailing for cryptocurrency when it comes to adoption, with governmental rejection of crypto remaining just as (if not more) likely in some nations as adoption. That said, with the market showing renewed signs of bullishness as we write this, it’s likely that the overall trend will be towards more adoption rather than less.

2021: How accurate were predictions last year?

Back in 2020, industry players predicted that bitcoin would see increasing investment interest from institutions in particular. This is indeed what happened, with the current bull market being largely driven by institutional investors.

They predicted the growth in Ethereum (ETH) and decentralized finance (DeFi), with the latter (in terms of total value locked in) growing, per DefiLlama data, from around USD 21bn at the start of the year to USD 241bn, as of writing. Likewise, Ethereum accounts for 67% of this value, indicating just how pivotal it has become.

One other thing the commenters predicted in our previous year’s ‘adoption trends’ article was the growth in interoperability platforms and protocols, something which would allow chains to pool resources and value. This was particularly true with regards to the launch of the various cross-chain bridges we saw during this year, such as Wormhole, Avalanche Bridge, and Harmony.

Expect more institutions to come

Given that a new bull market driven by institutions appears to be emerging, it may come as no surprise to learn that analysts are predicting even more institutional adoption of BTC and other cryptocurrencies in 2022. In part, this should be driven by growing inflationary fears, as well as by the increasing normalization of crypto, something helped by new exchange-traded funds (ETFs).

“After the successful launch of [the ProShares] BITO ETF, regulators in the US and elsewhere will be less resistant to more bitcoin and other crypto ETFs. As a result, I expect we’ll see increased institutional adoption of bitcoin and crypto as an investment vehicle going forward,” said Fawad Razaqzada, an analyst at ThinkMarkets.

For OKEx’s director Lennix Lai, the approval of ETFs really does open the door to significantly increased institutional adoption of cryptocurrencies in 2022.

“We definitely believe with the launch of the Bitcoin ETF, it will attract higher adoption across the spectrum. Reason being more traditional retirement plans, pension funds, brokerage accounts will not accept crypto investments, which is where the bitcoin ETF comes into place,” he told Cryptonews.com.

Other analysts largely agree with this overview, even if they note that it’s dependent on various factors. Simon Peters, an analyst with eToro, notes that institutional investors have accounted for increasing inflows into bitcoin for several weeks now, and that this trend will likely continue as more institutions come to adopt BTC as an investment vehicle and inflation hedge.

Bitcoin saw inflows totaling USD 95m last week, representing the largest inflows of all digital assets, per CoinShares data. While the inflows slowed down last week, in this 8-week bull-run they now total USD 2.8bn with year-to-date inflows now at a record USD 6.4bn.

Peters adds that the likelihood of increased institutional involvement with bitcoin will rise if the US Securities and Exchange Commission (SEC) approves a spot ETF (i.e. one where the fund actually holds BTC).

“Investors (both institutional and retail) who have been interested in bitcoin and cryptoassets more broadly, but are reluctant to buy the underlying asset due to concerns around regulation/insurance, etc. may feel more comfortable getting exposure via an ETF instead,” he said.

For Ben Caselin, the head of research and strategy at AAX, the approval of a spot-based Bitcoin ETF will be vital if institutional adoption of cryptocurrency is to really take off next year.

“Before we see larger players come into the market, we would need to see more ETFs pass the bar, including physically-backed ETFs. As the pressure continues to build on the Federal Reserve and central banks in general, we can expect more capital to flow from traditional inflation hedges to bitcoin,” he told Cryptonews.com.

Others suggest that while SEC approval is welcome, institutions will continue embracing bitcoin regardless in 2022, simply by virtue of its market growing in size.

“As the ecosystem grows in scale, their involvement is inevitable.  At the margin, the SEC’s latest move brings that inevitability a little closer,” said Lou Kerner, the head cryptocurrency analyst at Quantum Economics.

More legal adoption?

With El Salvador officially adopting bitcoin as legal tender in September, there’s also a distinct possibility that other nations will follow its example in 2022. However, this depends on just how successful El Salvador’s embrace of BTC ends up being, with many nations in similar situations mostly observing from a distance for now. As reported, the CEO of the crypto exchange giant BitMEX Alexander Höptner estimates that “at least five countries” will “accept bitcoin as legal tender” before next year is out.

“I think most would-be countries are just sitting back and watching to see how El Salvador’s economy will evolve with the adoption of BTC as legal tender. If successful, I am sure more countries will follow suit — if not fully like El Salvador, then at least in other ways — especially those with weak economies and where currency crises are prevalent,” said Fawad Razaqzada.

Ben Caselin also suggests that future adoption of bitcoin as legal tender depends quite heavily on El Salvador. Nonetheless, if things do go well, there are other countries that may similarly stand to gain from adoption.

“In countries like Mexico, Peru, and Colombia, unbanked communities comprise more than 50% of the population. In South East Asia, in countries such as the Philippines and Indonesia, we find similar figures,” he said.

While he doesn’t necessarily expect more formal adoption to take place in 2022, he does suggest that “we will see countries signaling their interest” in moving closer to crypto next year.

On the other hand, some analysts say it’s almost inevitable that other nations will turn to bitcoin and other cryptocurrencies in one way or another, if not in 2022 then not long after.

“I think there is every possibility that other countries could follow in the footsteps of El Salvador and make bitcoin legal tender. Most of ‘the noise’ seems to be coming from Latin America at this moment in time,” said Simon Peters.

Lou Kerner is even more explicit about bitcoin and crypto’s chances in this respect, suggesting that it’s mostly a matter of ‘when, not if.’

“Just as the institutional adoption of crypto is inevitable,  so is the adoption of crypto by governments around the world. Adopting bitcoin as legal tender will be increasingly attractive for smaller governments without strong currencies,” he said.

Central banks and their tokens

That said, Anndy Lian, the Chairman of crypto exchange BigONE and the Chief Digital Advisor to the Mongolian Productivity Organization, says that developed nations will be more interested in central bank digital currencies (CBDCs) in 2022 than bitcoin or any other public cryptocurrency.

“The real crypto push from governments will be more likely to come in the form of central bank digital currencies, most notably in China. There the central bank is looking to use blockchain at the issuance layer for its digital yuan system, which is centralized,” he told Cryptonews.com.

He adds that a drive towards CBDCs may be catalyzed by Facebook (now – Meta), with its Novi app launching as a limited pilot in the US and Guatemala in October.

“If the Facebook initiatives take off then this could spur governments to action, if not creating their own digital currency, in supporting the growth of private sector solutions with improved regulations and support. A good example of this approach is in Ukraine, which voted almost unanimously to legalize and regulate cryptocurrency just a day after El Salvador’s official bitcoin adoption,” he added.

Lou Kerner also suggests that many governments may move more towards CBDCs in 2022, particularly those that feel threatened by bitcoin and other public and decentralized cryptocurrencies.

“Central bank digital currencies will be attractive for other governments looking to leverage technology to provide better financial infrastructure for internal or global use.   There will be some governments who resist out of fear of losing control, similar to countries who resisted the internet,” he said.

What about payments?

CBDCs bring us to the issue of payments, because while it seems likely that investors will increasingly adopt bitcoin and other cryptos as inflation hedges, it’s not clear whether the general public will increasingly use such currencies for making payments.

For Fawad Razaqzada, increasing payment use will follow on from increasing investment, with more holders and owners equaling more opportunities to use cryptocurrency for purchasing goods or services.

“This trend will likely gather momentum as more institutions get involved. So there is little doubt in my mind that 2022 could set a new record for crypto transactions for payments of actual goods and services,” he said.

Some analysts suggest that the use of cryptocurrency for payments is already picking up steam, and that it will therefore only gain further momentum in 2022.

“The usage of cryptocurrency to ‘make payments’ is already scaling rapidly. There’s more than USD 125 billion in stablecoins in circulation used to make payments,” Lou Kerner said.

He adds that cryptocurrency is already being used, for example, to incentivize community members to provide value to the community, from gaming (e.g. Axie Infinity) to talent networks (e.g. Braintrust).

“We expect this activity to continue to scale in 2022 and far beyond, similar to how e-commerce is continuing to scale 27 years after Amazon started selling books,” he said.

Likewise, Anndy Lian is another observer who argues that 2022 will only cement what is already happening in 2021.

“The trend towards greater use of crypto for payments has already started, with the recent news in the US that cinema chain AMC will soon be accepting cryptocurrency payments. It comes just a few months after PayPal decided to allow US consumers to use crypto to make purchases and news that Mastercard would be supporting cryptocurrency payments across its network,” he said.

Despite these significant inroads, Ben Caselin urges some degree of caution, arguing that while we see bitcoin’s use in El Salvador, for instance, we’re still very much in a growth phase where market volatility militates against everyday use of many cryptos.

He says, “For Bitcoin to take hold as an everyday payment system and currency, more adoption is needed […] It may take a few more years before we can see Bitcoin being used more for everyday payments globally.”

 

 

Original Source: https://cryptonews.com/exclusives/crypto-adoption-in-2022-what-to-expect.htm

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Facebook becomes Meta- What is next?

Facebook becomes Meta- What is next?

Facebook recently announced at the company’s Connect event that it has changed its name to Meta. Many people may be a little curious about the word Meta, which means beyond in Latin. As CEO Mark Zuckerberg said in a letter published to accompany the event, “I used to study Classics, and the word “meta” comes from the Greek word meaning “beyond”. For me, it symbolizes that there is always more to build, and there is always a next chapter to the story.”

 

At the same time, Facebook announced that it would soon change its NASDAQ stock ticker symbol from FB to MVSE starting on December 1. As reported in The Verge, which first interviewed Zuckerberg in July, the change in name is in part motivated by a strategic shift from being known primarily as a social media company to focus the metaverse plans. This is reflected in the reporting of financial results, rather than the company’s structure, splitting between apps and metaverse related products.

 

Facebook is not just changing its name. “All of our products, including our apps, now share a new vision: to help bring the metaverse to life. And now we have a name that reflects the breadth of what we do,” confirmed Zuckerberg.

 

But is that the full story behind the shift? Indeed, there’s speculation that a primary goal may be to make its crypto wallet Novi a game-changer. Currently, Novi is pitched as simply a “digital wallet that helps people send and receive money internationally — instantly, securely, and with no fees”.

 

But if the plan works, Novi may become the digital interface for all encrypted assets, from cryptocurrencies to NFTs, in the metaverse that Meta is planning to create.

 

Why did Facebook change its name?

 

Zuckerberg admitted that Facebook as a brand was stuck in the past being regarded as a social media company. Put simply, the renamed Meta now represents more than a re-skinned Facebook concept.

 

“Right now our brand is so tightly linked to one product that it can’t possibly represent everything we’re doing today, let alone in the future. Over time, I hope we are seen as a metaverse company, and I want to anchor our work and our identity on what we’re building towards,” says Zuckerberg.

 

Now Facebook is just one of Meta’s suite of products:

 

WhatsApp – messaging app

Oculus VR — virtual reality (VR)

Onavo — mobile network analytics

Beluga — messenger service

Instagram — photo and video-sharing app

 

What role will the Novi wallet play?

 

Whether Meta’s goal is to become the backbone of the crypto field or replicate the success of crypto-asset exchanges, Meta hopes to join the crypto field based on Zuckerberg’s remarks. Facebook recently announced a pilot project in collaboration with Coinbase and Paxos. They enticed users to try it by promoting Facebook’s digital wallet, Novi, to users in the US and Guatemala shortly before the name change announcement in October. The aim is to allow the business to “evaluate the wallet’s core functions and showcase operational capabilities, specifically those around customer service and compliance. Novi is also being designed for interoperability with other digital wallets,” according to a report in Cointelegraph.

 

As early as 2019, Facebook attempted to enter the crypto field by launching its own token Libra, but it ultimately failed. Finally, under the combined pressure of the US Central Bank and policymakers, the token was forced to cancel. Libra was later tweaked, relaunched, and renamed Diem. The spokesperson stated that the company has not abandoned support for the Diem network, a permissionless payment system that is still awaiting the green light from Washington. “We intend to launch Novi with Diem once it receives regulatory approval and goes live,” the spokesperson told Cointelegraph.

 

It may be surprising that the Novi project has been heavily criticized by some US senators who oppose Facebook’s relaunch of cryptocurrency and digital wallets. But the response from Diem, the associated stablecoin project, shows how challenging these organizational changes maybe for regulators and lawmakers. In response to the letter calling on Facebook to halt its stablecoin and crypto wallet projects, Diem stated that it “Diem is not Facebook. We are an independent organization, and Facebook’s Novi is just one of more than two dozen members of the Diem Association. Novi’s pilot with Paxos is unrelated to Diem.”

 

Despite the senators’ criticism, the Novi encrypted wallet project has certainly not given up. It will likely play an essential role in Meta’s future crypto provision. According to relevant information, as Facebook becomes Meta, its payment and financial services and Novi are being integrated. Meta plans to unify all payment methods and financial services under the Novi brand in the future, with significant implications for its metaverse business offering in the future. In a recent report UK-based blockchain VC Outlier Ventures confirmed the need for the metaverse to have a crypto decentralized core, with its own payment system as key: “The defining characteristic of a true Metaverse is that it needs its own economy and currencies native to it, where value can be earnt, spent, lent, borrowed or invested interchangeably in both a physical or virtual sense and most importantly without the need for a government.”

 

Crypto, NFTs and the Metaverse

 

Vishal Shah, Facebook’s head of metaverse products, said the aim was to enable “as many creators as possible to build a business in the metaverse.” Shah underlined the importance of the diversity of creators in the metaverse: “Creators who make digital objects, creators who offer services and experiences and those who build entire worlds like game creators do today.” In turn, the diversity of creators will be reflected in the diversity of business. And in underlining this point about “new types of ownership models,” he pointed out the role of NFTs, with the new Meta platform making it easier “to sell limited education digital objects like NFTs, display them in their digital spaces and even resell them to the next person securely”.

 

Crypto experts such as Anndy Lian, Chairman of BigONE Exchange commented earlier last week on Twitter too: “#Meta means beyond in Greek. Are you ready for it’s future? I am.” Ben Armstrong ALA Bitboy is also bullish on metaverse projects too. He mentioned this on his Tweet too: “Are you bullish on #metaverse projects? These are gaining more and more traction.”

 

All in all, I have to say this- Metaverse is the future.

 

 

 

Original Source: https://hackernoon.com/facebook-becomes-meta-what-is-next

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Op-ed: Bitcoin Dominance and What It Really Means for the Crypto Market

Op-ed: Bitcoin Dominance and What It Really Means for the Crypto Market

When Bitcoin first came on the scene a decade ago, it was the only cryptocurrency available. It had 100% of the crypto market share at the time. Until 2017, Bitcoin accounted for approximately 95% of the cryptocurrency sector’s market capitalization. The rise of altcoins such as Ethereum (ETH), Cardano (ADA), and Litecoin (LTC) has eroded Bitcoin’s market dominance. Despite the emergence of altcoins, Bitcoin continues to account for over 70% of the cryptocurrency market until January 2021, when its relative dominance has declined. This is despite reaching an all-time high in April of $64,000 and the price of Bitcoin rising to a new all-time high of $66,000 on October 20, boosted by news that the first Bitcoin ETF. The general rule is that when BTC dominance goes up, altcoins lose value against BTC. And when BTC dominance goes down, they gain value. So, is this well-known trend changing in 2021?

Why is Bitcoin still so dominant?

At the beginning of March there were 12,170 altcoins on the market, according to CoinMarketCap. Despite these figures, investors continue to put over 50% of their funds into Bitcoin when investing in cryptocurrency. When some investors are deciding how to diversify their portfolios, there is clearly a “Bitcoin bias” at work. Because Bitcoin is both the most well-known and trusted cryptocurrency, it serves as an entry point into the crypto world for most people. As the price rises with a bull market, people see it as a good investment and want to get into the market. We’ve seen time and again that when the price of Bitcoin rises, new entrants flock to the crypto market. As a rule, when money flows into Bitcoin rather than other cryptocurrencies, the price of Bitcoin rises, extending Bitcoin’s dominance. Then we see the reverse happening, as investors putting their Bitcoin profits into large altcoins, all the way down to small-cap altcoins, before returning to Bitcoin. The cycle keeps returning to Bitcoin because it is the entry point for most new cryptocurrency users.

We saw a significant decrease in Bitcoin’s dominance in January, which fell from 73 percent to 40 percent. As of today, it still has a market share of less than 50%. During this time, the largest altcoin, ETH, has increased in value by about 400%, while Bitcoin has only increased by about 70-80% – what is possibly a key reason why Bitcoin has been losing its dominance in 2021. Plus, when the price of Bitcoin goes up savvy crypto traders know that this often has a beneficial impact on altcoin value, especially Ethereum which has grown in popularity with the Eth2 upgrade and the proliferation of DeFi apps based on the platform.

We also can’t ignore the fact that the valuations of the major altcoins are skyrocketing in price, despite a few glitches along the way such as Solana’s (SOL) recent outage; it’s now a question of why put your money in Bitcoin when there are more rewarding crypto assets? We believe therefore that the rise in altcoin valuations is the key driver for the current reduction in Bitcoin’s dominance, despite the twin all-time high price rises to over $60,000 this year so far. The pace of innovation in Ethereum and rival altcoins’ numerous upgrades to meet market demands, are key factors contributing to their growing dominance relative to Bitcoin.

Another solid reason why Bitcoin’s dominance is slipping, is down to the maturing nature of the 2021 crypto market. Noting the growth in size of the overall crypto market value in 2021, Frederick Vold, writing in CryptoNews, points out that the total market capitalization crossed the $2.5 trillion mark in mid-October:

“It is worth noting is that bitcoin’s dominance of the overall crypto market valuation is lower now than during the all-time high which the bitcoin price hit in April. Back then bitcoin’s share of the crypto market made up about 54%. As of today, the bitcoin dominance is around 44%-46% (depending on a data provider), having remained relatively stable around 40% since mid-May.

“The slightly lower bitcoin dominance this time around indicates that more altcoins are experiencing growth in their market capitalizations. However, it is also important to note that the number of altcoins is constantly rising, which, all else equal, reduces bitcoin’s share of the crypto market,” Vold added.

BigONE’s View

BigONE believes Bitcoin acts as a bridge for new users to enter the cryptocurrency market, as the best known and most widely publicized in the mainstream media. It is easier to persuade new users of the value it offers because it has stood the test of time and is the most reputable cryptocurrency, especially when fears of Ponzi schemes persist in the market. “There are a lot of scams and criminal operations that target individuals and it’s very important to recognise that in an unregulated market there is no recourse,” says Ian Taylor, the chief executive of lobby group CryptoUK in a recent FT article. Bitcoin also serves as an entry point for large institutional investors and regulators interested in learning more about the crypto space. Along with worries about rising inflation, spurred on my rising energy prices and raw material costs, institutional investors can now get safer exposure through the ProShares Bitcoin Strategy ETF. It ended with $1.1 billion under management on Wednesday October 20 after trading volume topped $1.2 billion, according to a press release. That’s the quickest that an ETF has reached the $1 billion-mark, Bloomberg Intelligence data confirmed.

We believe that user trust in other cryptocurrencies is still growing and that this will be the deciding factor in the battle for crypto market ‘dominance’. In addition, Bitcoin’s influence is beneficial to the crypto space because it acts as a “trust gateway” for new entities and users to understand and invest in the crypto space. As Shaun Heng, vice president of growth and operations at CoinMarketCap, a cryptocurrency ranking and analytics platform, told Cointelegraph: “Although Bitcoin is volatile, I believe it will still dominate the market for a while to come. Bitcoin is the basis for which all other cryptocurrencies were made, and while I don’t expect to see it reach the heights it did in the past, I also don’t think it will fall off considerably in the foreseeable future.” Chairman of BigONE Anndy Lian said that in the long term it was unlikely that Bitcoin would reach the heights it had in terms of dominance at the start of 2021. “The crypto market’s rapid change, from the rise of stablecoins like USDT and BUSD, to the popularity of meme coins like Dogecoin, is the backdrop for the decline of Bitcoin’s dominance. However, I believe the price of Bitcoin is set for even greater all-time highs in the near future, and with new Bitcoin ETFs coming on stream, it’ still the cryptocurrency of choice for investors.”

 

Original Source: https://www.securities.io/bitcoin-dominance-and-what-it-really-means-for-the-crypto-market/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j