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Was 2021 the year of institutional crypto? This past year saw way more institutional involvement than before. 

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2021 made something crystal clear: Institutional players are no longer shy about their intentions to flock into the crypto-verse. In fact, institutional inflow into crypto assets amounted to a whopping $9.3 billion in 2021. That's 3 times more than what we saw in 2020! 

Here’s a quick recap of what transpired on the institutional front in 2021.

In July of 2021, MicroStrategy managed to accumulate $2.7 billion worth of BTC via a series of strategic debt-financing methods. Within just five months, this amount now stands at a substantive $7 billion. 

However, it is not just merely about the accumulation of BTC for MicroStrategy; the company has also incorporated said BTC investments into its financial statements, thereby formally recognizing BTC’s capacity to raise capital for new ventures as a form of digital gold. 

Facebook arrived at the crypto-verse in style. In fact, they even took their entry into the space to the next level by adopting a whole new name altogether: Meta. 

With this rebrand, Meta is now seemingly focusing its main efforts on providing a plethora of immersive tools and technologies to enable the existence of the metaverse. For example, Presence Platform is one such tool that they have developed in recent times. This is a smart move on Meta’s part, as the concept of metaverse (and the virtual assets and properties that come with it) is predicted to grow into a $800 billion industry by 2024. 

Next, a review of 2021 will not be complete without a proper appraisal of the NFT space. What DeFi was to 2020, NFTs definitely are to 2021.

In fact, “NFT” as a term was used so much in 2021 that renowned dictionary publisher Collins even named it the “Word of the Year” of 2021. So what really caused NFTs to become so popular in 2021?

The slew of pandemic-related lockdowns that took place across the globe in 2021 definitely played a key role in precipitating the meteoric rise of NFTs. What’s more, if users want to enter the Metaverse to participate in ecosystems like those of play-to-earn (P2E) games, they will inevitably have to interact with and purchase NFTs. This is because NFTs’ easily verifiable nature renders them the perfect “keys” to unlock the gated digital communities and/or ecosystems that most within the crypto space have now come to understand and see as the metaverse. 

just where is the metaverse headed to in 2022?

At a high level, the metaverse theme is still likely to play out in 2022 due to the strong institutional presence within the space. However, it is unlikely to play out in the way that most people are expecting or envisioning; the metaverse will not be a “Ready Player One” or virtual reality-based space. These are idealistic goals that are simply unachievable in the near-term.

Instead, what is more likely to play out under the metaverse theme would be “smaller” and more feasible projects like those that utilize NFTs for music (there are already many projects for this, but even more are expected to emerge in 2022 as more celebrities and institutions enter the fray), NFTs for sports (ala NBA Top Shot), NFTs for ticket sales (to prevent scalping) and NFTs for fashion. 

All the above, when built in tandem, will actually constitute the foundation and cornerstone of the eventual metaverse, whatever form it may take in the years to come, as individuals and groups are given small but crucial stakes within this exciting digital future. 

Of course, and as with all things, whenever institutions start streaming in, and mass adoption starts picking up some steam, regulation will typically tightly follow. In 2021, the crypto regulatory landscape changed drastically. 

For the crypto space, this is not a bad thing at all. In fact, the regulators in many jurisdictions have actually gone out of their way to be crypto-friendly in order to coax innovators into their jurisdictions.

In what was heralded as a key moment for BTC and the crypto space in general, the U.S. Security Exchange Committee (SEC) approved the first Bitcoin Futures ETF in Q4 of 2021, opening the doors for a wide base of non-crypto native investors to gain some crypto exposure. 

The greenlighted BTC ETF shows that regulators do recognize the market’s appetite for BTC, and that they are willing to work around it instead of imposing an outright ban on cryptocurrencies. 

Stablecoins are another facet within the larger crypto ecosystem that regulators focused a lot on in 2021, and will likely be focusing a lot on too in 2022. 

This comes with good reason; many of the major stablecoins out there like Tether have so far been very opaque with regard to their reserve holdings. As this potentially poses a great risk to many crypto users, the U.S. President’s Working Group (PWG) has been actively lobbying for Congress to police stablecoins like a bank, where stablecoins will then be required to hold their reserves only in stable assets. This is similar to how the Basel Committee requires banks to hold their reserves only in cash.  

What will 2022 likely bring about? What will be the theme(s), narrative(s) and flavor(s) of the year in 2022?

The crypto space will only get more dynamic as we enter 2022. Therefore, it will be extremely important to remain nimble and adaptive in this space. As education and knowledge will play a huge part with regard to anyone’s ability to do that, Bybit will look to be a reliable, consistent and loyal partner-in-arms for you in this aspect. 

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