VanEck Year-Day Review: 5 Keys and 5 Values ​​for the Crypto Market

2021 is an important year for the adoption and realization of cryptocurrency, and we expect this period to continue into 2022. Here we look at 5 key things that need to be done in the crypto space in 2021 and we give predictions about what will happen in 2022.

2021 Crypto Market Highlights: Impact in the Crypto Space and Rise of Traders

1. Fintech companies and payment providers are still beginning to adopt blockchain while adopting crypto solutions.

It is widely recognized that the financial services industry is a key target for blockchain technology. We believe that blockchain technology is inherently deflationary, as it provides greater efficiency and transparency to the whole system, thereby reducing transaction costs. In 2018, Square established itself as an early beneficiary of cryptocurrency by allowing users to buy and sell bitcoin within the app. In 2021, PayPal, Venmo, Mastercard, and even Twitter all started allowing consumers to trade with Bitcoin. As Mexican cryptocurrency money transfer company Bitso says, offering remittance solutions at affordable prices will help you get more transactions from big financial institutions like Western Union.

2. The industry's use of the blockchain and adoption of smart contracts has exploded, with transaction volume on the Ethereum network reaching $3.5 trillion.

Many crypto applications, from NFTs to smart contracts, have emerged from Ethereum's fertile soil. In 2021, there will be a further increase in the Ethereum trading network against the impact of the expansion and adoption of Ethereum-based services such as NFTs. In the future, we hope to see significant growth in smart networks like Ethereum and Solana as the number of participants and use of the network continues.

Explosive Growth of All Ethereum Network Benefits in 2021

3. Bitcoin is starting to unleash its full potential as a fiat destroyer, especially in trading nations.

Since its release in 2009, many Bitcoin proponents have preferred to view Bitcoin as a safe haven, protecting investors from the negative impact of financial and monetary policy used in the new design and marketing. Since Bitcoin is decentralized and has a stable hold, it does not face the financial impact that fiat currency has on the world. Geographically, Bitcoin can provide a lucrative advantage to other foreign markets rather than relying on IMF/World Bank loans, which sometimes leads to worse solutions.

In September 2021, El Salvador was the first country to recognize Bitcoin as a viable option.

4. China's restrictions on cryptocurrencies traded in the global mining market for US miners

Bitcoin relations with China have been "love-hate relations" since the beginning of digitalization in 2009. On the other hand, Chinese miners control most of the global relations. Chinese power, and on the other hand, they are one of the leading manufacturers of ASIC Chips used for Bitcoin mining. On the other hand, the Chinese government has threatened to ban bitcoin mining and trading and strict regulation of cryptocurrencies, ultimately banning all cryptocurrency trading, mining and trading. The long term effects are still visible, but the short term effects are clear. Cryptocurrency miners left the country, and part of the global mining industry immediately began flocking to miners in the United States and elsewhere. With trading in China and the mining industry, the United States and other miners face less competition and more opportunities to make their share of the global energy sector.

5. Crypto IPOs represent phenomenal growth in the digital asset industry as crypto pioneers are building industry partnerships.

2021 is a big year for companies listed on the cryptocurrency market. Coinbase doubles as the Nasdaq and is almost as big as the Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, making it the largest crypto company in history. In addition to Coinbase, many miners and other crypto sponsors have grown, including Coinshares, Bakkt, and Stronghold Digital Mining.

As a group, the market value of the crypto pioneers represented by MVIS Global Securities is expected to grow in 2021, supported by a wave of IPOs and partnerships. Cryptocurrency pioneers are now stepping into the market value of their longtime competitor, the gold diggers!

Crypto Pioneer odds have reached miner temperature

Cryptocurrency predictions for 2022: more IPOs, more applications, more acceptances

1. The most crypto-intensive companies will go public in 2022.

We believe that there are still many crypto companies ready to go public and 2022 will continue to have new names in 2021. And crypto companies can participate in many industries from exchanges to digital mining tool for payment companies. As the cryptocurrency industry continues to grow and improve, we expect the market to grow as new companies go public, and we expect the market to evolve as that corporate wisdom rises and falls.

The figure above shows the top 7 cryptocurrency companies listed, including payments (credit cards, digital payments, etc.), hardware (hardware design companies), mining, exchange and holding partnerships. / crypto-currency trading (ex. Microstrategy), software services (crypto-related digital infrastructure), banking and real estate management.

2. Non-Fungible Tokens (NFTs) have emerged from their archetypes and entered mainstream culture, with millions of users. The next major events that will take place will be football matches, themed matches and esports.

NFT will be reborn in 2021. But we believe better things are yet to come. In our view, both prevent the overuse of NFTs. The first is that the user interface (UI) of the NFT platform should be easy to integrate with users without native access. The NBA TopShot is a great example of an NFT project that makes it easy for unencrypted users to purchase NFTs. The second impact on adoption is NFT's narrow use of current data. There are a few apps out there, but we think sports tickets, honest content, and esports will be the next big area where NFTs can flex their muscles easily. The smart engagement provided by the NFT platform will encourage participation, and the ability to offer features such as the VIP lottery will increase fan engagement and enjoyment.

3. Ethereum will receive major network upgrades to increase network capacity away from power-based proof-of-work mechanisms.

Both Bitcoin and Ethereum use "proof of service" (PoW) algorithms to identify blockchain logs and prevent malicious attacks. By 2022, Ethereum plans to move from “functional certificates” to “certification points” (PoS), which will transform the landscape of Ethereum-centric miners. By shifting the focus to power-intensive (PoW) solutions, the proof-of-concept offers better power efficiency, increased network capacity, reduced risk of access interference, and provides the Ethereum blockchain with greater protection in the holder. One of the major issues with the upgrade request is that Ethereum hardware mining no longer exists.

4. Bitcoin continues to grow in terms of institutional membership and adoption as more emerging countries announce Bitcoin Fiat (El Salvador 2.0).

As the asset market expands, we expect more companies to add bitcoin to their balance sheets and expand their mining operations to maximize revenue. As El Salvador points out, some emerging markets may see Bitcoin as valuable as financial instruments, which is also a solution to avoid too much IMF impact on World Bank debt.

5. ESG investors finally see Bitcoin as an accelerator of green energy adoption and financial inclusion (ESG: Environment, Social Responsibility, Corporate Governance).

Unfortunately, inaccurate data and unknown ESG concerns from investors continue to plague the cryptocurrency market, especially when it comes to the energy required to mine Bitcoin. As the controversy continues, we believe cryptocurrency miners will continue to play an important role in green electricity and financial accounting. US Bitcoin Leader Miner Riot Blockchain has been a consultant and supporter of the Bitcoin mining industry and has had a positive impact in discussions around the sustainable use of electricity. Stronghold Digital Mining, another ESG-focused Bitcoin mining company listed in Q4 2021, uses coal mining waste (a by-product of coal mining) to generate electricity used for mine bitcoin. We hope mining companies will focus on safety to further develop their business.