The institutional research team at Coinbase (NASDAQ:COIN) has released a report on the growth of the institutional crypto economy in 2021. The report contains information about the DeFI Bitcoin Fund, the metaverse and events expected in 2022.
The crypto asset market has seen significant growth in 2021, especially in DeFI, NFTs and the launch of the first Bitcoin futures ETF in the US.
And 2022 is expected to be another critical year in the development of the crypto economy, including the merger of the Ethereum mainnet with the Beacon Chain
The main conclusions of the report are as follows:
Bitcoin (BTC) achieved two important goals in 2021. While its market cap surpassed $1 trillion, BTC later crossed $400 billion in realized capitalization in October.
The US Securities and Exchange Commission’s (SEC) approval of the first Bitcoin futures ETF BTC on the New York Stock Exchange fueled BTC’s rally early in the fourth quarter of 2021. Trading volume increased by $1 billion on the first day, expanding the scope of crypto assets.
Ethereum (ETH) has seen significant gains relative to BTC in 2021; with ETH/BTC reaching its maximum value in early December.
Network saturation and high gas velocity in Ethereum are driving the rapid development of other Layer 1 (L1) homegrown solutions in 2021, as well as Layer 2 (L2) scaling solutions.
Consolidation of the metaverse will take time, but the transition from Web 2.0 to Web 3.0 presents long-term opportunities for cryptonetworks and storage technologies. Meta’s (NASDAQ:FB) announcement sparked a rally in metaverse-related cryptocurrencies, fueled by retail and institutional investors.
According to DeFiLlama, the total value locked in DeFi protocols grew from approximately $17 billion at the beginning of the year to approximately $250 billion at the end.
The market capitalization of the largest stablecoin issuers has grown by about 435% in 2021, from $28 billion to more than $150 billion, according to the Skew database, as the use of these assets has become more visible.
David Duong, head of institutional research at Coinbase, explains it this way: “Cryptocurrencies have come of age among sophisticated investors. They are now actively using them to implement advanced trading strategies developed in established sectors. We are seeing firms looking to capitalize on cross-currency arbitrage opportunities, DeFi-focused yield strategies, and even NFT-specific funds that view the rising market as a growing trading opportunity,” the expert added.