2021 was a banner year for the cryptocurrency industry. Moments like the Coinbase IPO, the rise of Dogecoin, and Elon Musk tweeting, have signified a change in the cryptocurrency space and our culture as a whole.
These changes might seem trivial, but are in fact the result of the growing influence of the cryptocurrency community and the other innovative blockchain technologies of the last decade. With a little over a quarter of the year left, these are the trends and changes we’re watching through the end of 2021 and into 2022.
1) General Adoption of Cryptocurrency
Cryptocurrency was the Wild West of the financial world for many years – now? Not so much. We can attribute this to the adoption of crypto by mainstream enterprises. From fintech companies like PayPal and Square which have opened up crypto capabilities on their platforms, to entertainment companies like AMC which announced its plan to accept Bitcoin payments by the start of 2022—bigger companies are co-signing the shift to crypto. Even legacy financial institutions like J.P. Morgan and Goldman Sachs have made the decision to stake their claim in this industry.
We anticipate that more and more companies will begin to adopt cryptocurrency, which will lead to greater adoption by crypto newbies. This will lead to the integration of crypto in a number of other financial spaces, such as retirement accounts. In fact, the cryptocurrency market has a total market capitalization of over $2 Trillion USD.
2) Crypto Taxes and Regulations
Alongside the increased adoption, we see the continued mission to regulate and tax cryptocurrency transactions, in the US and globally. The IRS has been cracking down on cryptocurrency taxes over the past year, and standards and regulations have steadily grown to be more stringent.
Crypto taxes and regulations will become more standard and leveled at the state and federal level. In order to ensure your crypto taxes are filed properly, we recommend developing a strong plan and strategy to document your crypto transactions so you’re prepared when tax season rolls around.
3) The Rise of NFTs
NFTs, or non-fungible tokens, are digital assets that live on the blockchain. Most often used for art, film, music, or sports, this technology empowers artists and athletes, and allows them to make money on digital souvenirs. Unlike classic investment items such as fine art, vintage records, or property, these assets are entirely digital, and reflect the increasingly prevalent societal movement toward digital investments.
4) 5G Integration into Cryptocurrency
5G is frequently discussed as a game-changer for a number of industries – it operates with a greater capacity, and is a much faster, lower-latency option than most of the data transmission options currently available.
By integrating 5G into the blockchain, cryptocurrency transactions will not be limited to standard speeds. The widespread adoption of 5G technology will make it so all systems and traders will have the same ability to make transactions, no matter where their crypto exchange is located. This will democratize trades and transactions, and allow any user to make the most of cryptocurrency options.
5) Meme Cryptocurrencies
Dogecoin made headlines this year with co-signs from the likes of Elon Musk, Mark Cuban, and Naomi Osaka. Although the currency started as a meme, or Internet joke, it has grown to be a serious contender in the crypto space. The coin was originally released in 2013, but gained popularity this year.
What does this tell us? Dogecoin may have started as a joke, but its value in 2021 reminded everyone to take it seriously.
Cryptocurrency is such an exciting industry because of its constant evolution and the influence of the crypto enthusiast community. Cryptocurrency is on the verge of mass adoption which will completely change the centuries old financial model in the United States, and around the world. The ongoing collaboration between policy-makers, crypto companies, fintech companies, and legacy financial institutions is something to be excited about.
The cryptocurrency industry has an exciting future ahead, and we are looking forward to continuing sharing what we forecast for the future. As with traditional finance, past performance is never an indication of future results, and we’ll be sure to keep you updated with the latest trends.