Growth review of Crypto in 2021
Founders and investors tried to predict future of crypto
Each year, bitcoin and blockchain are gaining more momentum, and claims of bitcoin being digital gold are becoming more prominent. There have been many predictions regarding the crypto space, and “it is always fun to check predictions vs. results,”(by Soona Amhaz, founder of Volt Capital) so here is my take on that.
So let us go over each prediction one by one.
Institutional interest
Institutional interests will be at a peak, and investment banks and companies will start buying a stake in crypto. Banks like JP Morgan Chase, Morgan Stanley, Citi bank, Goldman Sachs, Commerzbank, BNY Mellon have shown their interest in crypto directly or indirectly.
Tesla bought $1.5 billion in bitcoins. Paul Tudor Jones claimed bitcoin as a hedge against inflation and invested a lump sum in bitcoin through his hedge fund. Many other hedge funds are starting to sail the crypto boat, increasing day by day. PwC released a hedge fund report which you can read here. https://www.pwc.com/gx/en/financial-services/pdf/3rd-annual-pwc-elwood-aima-crypto-hedge-fund-report-(may-2021).pdf
Credits: Alex Adelman(Lolli) for Tesla, Matthew Walsh (Castle Island Ventures), and Joshua Rivera (Blockchain Capital) for bitcoin ETFs.
Regulators
As Collen Sullivan of CMT Digital pointed out, this year would be the year of regulators. There would be a division of 2 sides. Either you support crypto, or you don’t. With China, Russia, and India (the Indian Monetary system is against) leading the charge of anti-crypto on one side while Canada, the US with some countries on the pro-side, it would start a new phase of regulations among crypto. Canada licensed bitcoin ETFs, so I agree it is just a matter of time before others countries fall in line.
Credits: Collen Sullivan (CMT) regulators year, Matt Corallo (Square Crypto) Western countries will attack bitcoin. Matthew Walsh (Castle Island Ventures) SEC and bitcoin ETF. Imran Khan (Volt Capital) US and Asia regulation.
Defi, FinTech and IPOs
FinTech, and Defi (Decentralised Finance) are integrating, and more banks are trying to get their hands on Defi by investing in newly created startups. Traditional FinTechs like Paypal and Visa have started investing in upcoming Defi startups, which is a good thing. New crypto-centric IPOs will come along this year, just like Coinbase. Our ultimate goal should be the use of DAOs to automate most of the process and have robust integration between all the traditional FinTech and Defi companies.
Credits: Meltem Demirors (CoinShare) IPOs, Alexander Svanevik (Nansen) DeFi meets FinTech, Simon Chamorro (Valiu) DeFi
Scalability and Second layer
There are many predictions regarding the second layer, improving the scalability and making the transactions much faster. I agree that the lesser prominent layer 1s will die, but the changes won’t be prominent in just a year. I suppose we would see more acclaim for Solana, which solves the blockchain trilemma of Scalability, Security, and Decentralization. With that being said, the Bitcoin Lightning Network and zk-SNARKS would also show significant improvements to use currencies more efficiently.
Credits: Stacie Waleyko (Casa) lighting network and scalability, Val Wallace (Square Crypto) Lightning uptake, Casey Caruso (Bessemer Venture Partners) 1s layers will die
Other Notable Predictions
In the coming months, there will be a lot of automation with the help of DOAs, and this is how Defi will become faster than it already is. Companies would require lesser human resources in the coming years. More mines using renewable energies will open and thus will give rise to higher hash values without any climate hazards. Also, one interesting thing to look out for would be hosting bitcoin mining services, as Meltem Demirors (CoinShare) pointed out. I indeed agree with Matt Huang (Paradigm) about capital and talent investment in this space. Come on, this is one of the hottest topics in the world, and everyone wants their hands in it. With the launching of BitCout prediction of Tess Rinerarson is corrected. Let’s see where it goes in the next decade. Also, NFTs exploded, as predicted by many people in the article. Education and Gen-Z adoption will be very remarkable, and I being a student would love to see how the situation plays out.
Credits: Stacie Waleyko (Casa) Meltem Demirors( CoinShares) NFT and bitcoin mining, Linda Xie (Scalar Capital) DAOs, Sunayna Tuteja (TD Ameritrade) human capital and capital. Avichal Garg, (Electric Capital) NFT, DAOs. Tess Rinearson(Interchain) Qiao Wang (Defi Alliance) NFT Summer, Final Parabolic Cycle for BTC
Summing it up, most of the predictions were, more institutional interest; we would see more integrations of FinTechs and Defi space. Blockchain tech would become more scalable; the countries will take a much more proper stand on regulations regarding the crypto, and NFTs will boom. Some other notable was large-scale coordination through DAO’s, renewable energy for bitcoin mining, and hosting services.
In the end, a massive shout to Balaji Srinivasan, who summed up the whole article with “In 2021 the real battle of the next decade begins: BTC vs. MMT.” and I can’t agree more.
With this, thank you and until next time.
PS:- A lot of people aligned their thoughts in this direction, I could not include all. So please overlook the fact.
