The Coinbase (NASDAQ) research team:COIN) institutional has published a report on the growth of the institutional crypto economy in 2021. The report contains information on Bitcoin, Ethereum, and other altcoins, as well as the performance of NFTs, DeFI, Bitcoin exchange-traded funds, the Metaverse, and events expected in 2022.
- The crypto asset market has experienced significant growth in 2021, especially in relation to DeFI, NFTs and the launch of the first Bitcoin futures in the United States
- 2022 is expected to be another critical year in the development of the crypto economy; including the merger of Ethereum Mainnet with Beacon Chain
The main conclusions of the report are as follows:
- Bitcoin (BTC) reached two major milestones in 2021. In February it exceeded one trillion dollars of market capitalization. Later, in October, it exceeded 400,000 million dollars of capitalization realized.
- The approval by the U.S. Securities and Exchange Commission (SEC) of the first BTC futures ETF on the New York Stock Exchange contributed to BTC rising early in the fourth quarter of 2021. Trading volume increased $1 billion on its first day, expanding the scale of exposure to the crypto asset.
- Ethereum (ETH) made significant gains against BTC in 2021, and the currency pair ETH/BTC reached all-time highs in early december.
- Network saturation and high gas rates on Ethereum have driven the rapid development of other layer 1 (L1) blockchains in 2021 along with layer 2 (L2) scaling solutions.
- The metaverse will take time to consolidate, but the move from Web 2.0 to Web 3.0 presents long-term opportunities for crypto networks and blockchain technology. The announcement by Meta (NASDAQ:FB) sparked a rally in metaverse cryptocurrencies driven by retail and institutional investors.
- The total value blocked in DeFi protocols has gone from about $17 billion at the beginning of the year to about $250 billion at the end, according to DeFiLlama.
- The market capitalization of the largest stablecoin issuers grew by around 435% in 2021, going from $28 billion to more than $150 billion, according to our Skew database, as the uses of these assets became more apparent, especially among crypto natives.
David Duong, Head of Institutional Research at Coinbase, explains: “Cryptocurrencies have come of age among experienced investors. They are now actively using them to deploy advanced trading strategies developed in consolidated sectors.”
“We are seeing firms looking to benefit from currency arbitrage opportunities, DeFi-focused return exploitation strategies, and even NFT-specific funds that see the burgeoning market as a scalable trading opportunity.” Coinbase expects a “critical” 2022 for the cryptocurrency sector