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Source: DeFi Shirasawa Research Institute
Produced by | Shirasawa Research Institute
Between 2020 and 2021, the number of crypto wallets grew at a rate of about 20 million per year, today's number is about 80 million. This means that in just two years, the number of people involved in the crypto space has doubled. This figure already exceeds 1% of the entire population of the planet. In a survey of investors initiated by CNBC, more than 10% of investors said they were involved in crypto assets, so crypto assets have become another popular investment after real estate, stocks, mutual funds and bonds.
Next, we review the state of the crypto industry in 2021 from 7 perspectives:
- NFT Mania: From Vocabulary of the Year to Mainstream Adoption
-Predicted by industry experts
-Large financial institutions turned to the crypto industry
- Crypto unicorn company
- Crypto merges with sports
-Traditional companies turned to the crypto industry
-The Company's Bitcoin futures ETF was approved for listing
NFT Mania: From Vocabulary of the Year to Mainstream Adoption
NFT is collins Dictionary's Vocabulary of the Year 2021, and dictionary experts believe that this acronym, which represents Non-Fungible Token, is more representative of this year's world mainstream than any recently popular word.
As the NFT space evolves in 2021, industry players expect accelerated adoption of NFTs in 2022.
Michael Sonnenshein, CEO of Grayscale, believes that NFTs around use cases outside of digital art will flourish in the coming years: "The public discourse and momentum around NFTs proves the material value of digital verification. In the coming years, we will continue to see NFTs evolve from their current limited use cases (digital art) to new and more complex use cases. We want to see the physical and digital worlds merge further, especially around themes such as authenticity, provenance, ownership, and various fields such as fashion, music, gaming, real estate, and ticketing. ”
Google search for "NFT" has soared
NFT "out of the loop" is one of the most significant trends in the crypto industry in 2021. According to Google Trends, "Crypto" has been the most popular search term in Web 3.0, but in the early first quarter of 2021, "NFT" approached "crypto" for the first time, briefly surpassing it in December.
Image: "NFT" vs. "Encrypted" search volume worldwide
In some regions known for their high adoption of crypto assets (Africa, Asia), NFTs have surpassed Bitcoin in Google Trends. In Japan, for example, NFTs are more popular in the second half of 2021. In Ukraine, a similar "flip" occurred in early November. But in Nigeria, the impetus for the NFT mania is still lagging behind: because both crypto assets and Bitcoin are more popular here.
Image: In Japan, "NFT" versus "encrypted" search volume
Iconic moments for 2021
The most iconic NFT moment of 2021 came in March, when crypto artist Beeple sold his NFT artwork The First 5000 Days to Metakovan through established auction house Christie's for $69 million. According to Christie's auction records, the winning bid ranks Beeple among the three most valuable living artists in the world. This is undoubtedly an important moment in the art of crypto and proclaims to the world that NFTs are a force to be reckoned with.
Image: The First 5000 Days
Shortly after Beeple sold NFTs for sky-high prices, another established auction house, Sotheby's, followed with an auction themed after crypto artists.
In addition, Christie's held an auction for cryptopunks, the most popular NFT series in the crypto industry, and Sotheby's held an auction for the Bored Ape Yacht Club (BAYC, Boring Ape), both of which quickly made waves in the NFT field and the mainstream news media, and were undoubtedly one of the most memorable moments for the community.
BAYC is not the usual one
The Bayc series, which debuted last April, is undoubtedly one of the most popular NFTs on the market, as it offers users a wealth of choices and diverse features, in which each ape's features can be randomly generated algorithmically, so each ape has a unique background style, clothing, earrings, eyes, mouth, and fur. This certainly satisfies the needs of people today to show their individuality, and celebrities such as Jimmy Fallon, NBA player Stephen Curry and billionaire investor Mark Cuban are also holders of boring ape NFTs.
After half a year of experience, BAYC officially transformed, and in November it collaborated with Universal Music Group and legendary hip-hop producer Timbaland to launch two meta-universe bands. Yuga Labs, creator of the Boring Apes series, has signed with veteran music manager Guy Oseary to explore opportunities in a variety of potential formats, including film, television, music and video games. In addition, Yuga Labs continues to ramp up its exploration of the crypto world, planning to launch an Ethereum-based boring ape crypto asset in the first quarter of 2022. The token can be used to reward NFT holders, as well as for governance in the DAO, ultimately helping boring apes expand into the DeFi space.
Image: 4 boring apes "debuted" in universal music group's metacosmity band
Big brands engaged
Adidas
According to InftNews, the most important mainstream cross-border collaboration to date is Adidas' partnership with BAYC, Gmoney and PUNKS Comics, and in order to discuss plans with new partners, Adidas has also launched a new Twitter account "Adidas Originals" and will purchase BAYC #8774 as its profile picture.
The purpose of this move is, of course, to chase the meta-universe boom. Soon after, Adidas announced its exploration of the metaverse on Adidas Originals, and in order to explain its ideas to users, they also released a video clip depicting the boring ape and its partners in Adidas's possession seamlessly crossing the sky and entering the metaverse.
ubisoft
Ubisoft became the first game developer to apply NFTs to its own AAA masterpiece. In December 2021, Ubisoft announced the launch of a digital platform called Quartz on the Tezos blockchain, which allows players to acquire NFTs in the game. The first NFT is a game item in Ghost Recon: Breakpoint, and players can claim the NFT for free after meeting the level and game duration in the limited-time beta.
But while Ubisoft's entry brought NFTs into the mainstream world and was freely available, their efforts were not well received. In fact, their YouTube videos received more than 20,000 "dislikes" in the first hour, and the company was met with "NFT energy-consuming" protests from users on its social media, forcing it to take the videos off the shelves. For now, it remains to be seen whether Ubisoft will continue its plans.
This also reflects the fact that NFTs still require a lot of education to be accepted and adopted by a wider mainstream audience.
Of course, Ubisoft's efforts don't stop there. Ubisoft's director of blockchain technology has revealed that the digital platform is only the first step to see how players interact with NFTs. The "Play-to-Earn" and blockchain games of the 2021 fire are also on their radar.
Why enter the NFT space? The director means a lot: the shift to decentralization means Ubisoft will give players more control, and blockchain will really change the game when game developers put players at the center. Only in this way can the player have endless possibilities for the game world. For example, game items will no longer be bound to a single game world, and from a technical point of view, a real interconnection between game worlds can be realized, which will also open the door for a real "meta-universe", which is the ultimate goal of Ubisoft.
In addition to the above, Pizza Hut, McDonald's, Coca-Cola and other companies have launched their own NFTs.
NFTs are still a new technology in its early stages, but we're already seeing its appeal to mainstream companies and big brands in 2021, and it's inevitable that NFTs will be more widely adopted by the mainstream, both slowly and quickly.
Industry experts predict
Looking at the development of the crypto industry through the traditional perspective, you can see the current development status and the future trend direction.
André Neves, CEO of Zebedee, said: "Mass adoption is definitely on the rise, especially as Bitcoin reaches a level of legitimacy in the eyes of investors, banks, businesses and some countries. Such attention is bound to arouse public interest. I think the key to unlocking the next phase of "mainstreaming" lies in Bitcoin, which provides a simple use case and experience for users who want to use crypto assets for the first time. ”
Michael Kong, CEO of the Fantom Foundation, said: "Mass adoption has been going on for several years. Over time, we've seen crypto assets become more mainstream. For example, some of the large pension and pension funds in the US and Australia have already started investing in the market, something that has never happened before. As more mainstream companies and governments get involved, we will continue to see more examples of crypto asset adoption. ”
Larry Pang, Head of Business Development at IoTeX, said: "In the life cycle of technology applications, the blockchain and crypto space has passed the 'innovator' stage and is currently in the 'early adopter' stage. In 2021, we've seen household names like Visa, Facebook, and SoftBank build, adopt, and invest in the crypto space, legitimizing the technology and, more importantly, giving investors the confidence to explore this budding industry. ”
Don Basile, CEO of Roman DBDR, noted, "Tesla, Square, and MicroStrategy have all added Bitcoin to their balance sheets. There is nothing more mainstream than that. ”
While the crypto industry is still a niche player, there are a number of deliberate steps that can be taken to drive this trend forward, the most important of which are the explicit regulations of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Other countries are ahead of the United States in this regard, providing a safe haven for the industry to develop. Switzerland and Singapore are notoriously tightly regulated, but they are well aware that this is exactly what this nascent industry needs.
Large financial institutions turned to the crypto industry
Institutional interest in crypto and digital assets is growing exponentially in 2021, and traditional banks are joining the signs.
Citibank
Citibank, a large multinational bank, is one of the financial institutions that is increasingly interested in crypto assets. In May, the bank said it was considering launching a service that supports crypto assets after receiving a large number of requests from customers. In late August, the bank also revealed that it was considering offering bitcoin futures to some institutional customers.
Citibank has repeatedly made its point throughout 2021, such as its belief that whether crypto assets will disrupt the current payment system or not, but in addition to its increasing adoption as a store of value, it has also sparked new thinking in payment infrastructure, processing, and accounting. Today, large companies and other institutions need to consider the diversity of their portfolios.
Bank of America
Bank of America, the nation's second-largest commercial bank after JPMorgan Chase, formed a crypto research team in July 2021, arguing that crypto assets are too big to be ignored and that they are forming an evolving ecosystem, from DeFi to NFTs to GameFi. More and more major banks are becoming more open to the idea of incorporating crypto assets into their business models.
Notably, Bank of America mentioned in the research report that NFT is one of the main drivers of the current crypto market: "Although there are many voices that believe that NFT is just another bubble, NFT is already a huge ecosystem. The disruptive potential of NFTs will spread to other industries and extend far beyond the current bull market. ”
DBS Bank
Singapore-based DBS Bank, Southeast Asia's largest bank, has become one of the first traditional banks in the region to launch a digital exchange. Currently, the bank's crypto trading service is now live, offering spot trading between four fiat currencies (Singapore dollar, USD, HKD and JPY) and four crypto assets – Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH) and Ripple (XRP).
As DBS has more and more crypto assets in custody in 2021, the bank will continue to scale up.
Fidelity, JPMorgan Chase, Morgan Stanley, and Standard Chartered will also intersect with the crypto world in 2021, which will not be introduced here.
Top U.S. banks attract crypto talent
Research firm Revelio Labs analyzed 287 crypto-related job postings from Goldman Sachs, Wells Fargo, Fidelity, and JPMorgan Chase on linkedIn, a professional social networking site, and found that these four companies are the largest employers of crypto talent. In addition, Revelio concludes that crypto talent earns an average of 9 percent more than bank employees.
In addition, LinkedIn reports that the list of crypto and blockchain-related job openings has jumped 615% since August 2020.
Crypto is being embraced by traditional asset systems
With the listing of crypto exchange Coinbase as a milestone, the traditional financial system is gradually accepting the integration of crypto finance. Influencer brokerage Robinhood also uses crypto trading as a new growth point for the company.
A growing number of traditional financial professionals are joining crypto companies, such as former SEC Chairman Jay Clayton joining crypto hosting firm Fireblocks as an advisor; Faryar Shirzad, former head of government affairs at Goldman Sachs, joining Coinbase; and former Bridgewater Finance Director John Dalby joining crypto investment firm NYDIG.
In addition to the inflow of personnel, the crypto market is also gradually moving towards institutionalization. A data in September showed that institutional transactions already accounted for 63% of total crypto transactions, compared to less than 10% in 2017. The motivation for traditional financial institutions to eagerly enter the crypto space stems from the push of customers, Citibank's head of foreign exchange business Itay Tuckerman said in an interview that in 2020, he rarely received orders from large customers who want to trade crypto assets, but in 2021, he will receive several orders every week.
Crypto Unicorn Company
According to the survey, there are currently 8,785 Web3.0 companies, of which 60 have become unicorns. Based on historical data (which may not accurately capture a snapshot of a Web 3.0 company), as an entrepreneur who founded a Web 3.0 company, you have a 0.7% chance of becoming a unicorn business founder. These Web3.0 companies include: trading/brokers, crypto infrastructure, crypto financial services, data analytics, and NFT/gaming.
Crypto merges with sports
As one of today's hottest NBA stars, Stephen Curry has a huge network of fans around the world. On September 8, 2021, after buying boring ape NFTs on 55 Pieces of Ethereum as his social media avatar, he partnered with crypto exchange FTX to become a global ambassador and shareholder of FTX.
Argentine football superstar Lionel Messi left FC Barcelona, where he had played for more than 20 years, to move to Paris Saint-Germain. In fact, Messi's annual salary is $41 million in a new contract with Paris Saint-Germain, part of which will be paid using PSG Fan Tokens (the official token launched by Paris Saint-Germain Club). Ethernity Chain, an NFT distribution platform, has also partnered with Messi to release the Messi-themed NFT series The Messiverse. The series went on sale on August 20. In this series, the 34-year-old Messi is portrayed as a king, a superhero and a Greek giant, with works titled "Man from the Future", "Worth the Weight" and "The King", which represent the highlights of his career.
Image: The Messiverse series NFT showcase
Speaking of FTX, it has been generous in brand promotion and has repeatedly made big moves. In April 2021, he won the naming rights to the NBA Miami Heat's home stadium for a 19-year, $135 million contract, one of the most expensive naming contracts ever. In June, FTX formed a "long-term partnership" with Major League Baseball (MLB). MLB embroiders FTX on all referee uniforms. US logo, the referee will wear these uniforms and blow penalties for all events. FTX has also entered into a 10-year, $210 million exclusive naming partnership with esports club TSM (Team SoloMid). FTX has a 7-year partnership with the developers of League of Legends, with sponsorship from the League of Legends Championship Series (LCS).
Photo: The Miami Heat Arena was renamed FTX Arena
From this point of view, FTX is vigorously laying out the sports world, making it have a high degree of exposure.
In addition, well-known crypto exchange/payment service providers such as Coinbase, Cryptocom, and Bitpay have sponsored and named them. The sponsorship of crypto companies is also a huge temptation for the sports world. Nowadays, many people generally do not have a good impression of crypto assets, believing that they are very speculative and full of scams. These crypto companies are also actively building their image, and sponsoring or naming sports is conducive to the construction of their brand image.
Traditional companies turn to the crypto industry
Crypto payments are accepted
Throughout 2021, there are a lot of celebrities, groups, organizations, and companies announcing acceptance of crypto asset payments.
For example: Mayor Francis Suarez of Miami, Florida, Jane Custer, Mayor of Tampa, Florida, Eric Adams, Mayor of New York City, Scott Conger, Mayor of Jackson, Tennessee, and Jason Stewart of Cool Valley, Missouri, have pledged to accept salaries using Bitcoin; Odell Beckham Jr. of the Los Angeles Rams of major league football (NFL), Sean Kalkin of Kansas City, and legendary star Aaron Rogers have used bitcoin to receive salaries.
Photo: Miami Mayor Francis Suarez speaks at the conference
The most influential company is trammaker Tesla, which accepted bitcoin payments in a short period of time in 2021, followed by cinema giant AMC, which officially accepted BTC, ETH, BCH, LTC and Doge as payment methods in November 2021. The company is currently exploring adding SHIBs to the payments ranks.
PayPal with Visa
At the end of 2020, global payments giant PayPal began letting users trade crypto assets such as Bitcoin and Ethereum, then expanded it to subsidiary Venmo and created a "checkout with crypto" feature for merchants. In 2021, it also expanded into the UK market, announcing the launch of a crypto trading service for UK clients that can trade major crypto assets including BTC, ETH, LTC and BCH.
Image: crypto trading service in PayPal-UK, sourced from CNBC
Given that PayPal has 377 million users worldwide, this is a valuable addition to the crypto industry. The payments company has been pushing hard into the crypto industry. Interestingly, its roots are diversifying in 2022.
PayPal has confirmed that it will launch its own stablecoin, tentatively named PayPal Coin. Developer Steve Moser first discovered the in-house development of this stablecoin in the source code of the PayPal iPhone app.
Jose Fernandez da Ponte, senior vice president of crypto and digital currency at PayPal, confirmed in an interview:
"We are exploring a stablecoin; if we seek to move forward, we will of course work closely with the relevant regulators."
Visa, another payments giant, is on a different trajectory than PayPal. To align with the crypto industry, Visa has developed a strong strategy to bridge traditional businesses with crypto assets.
Visa has issued crypto credit cards on multiple continents around the world, making it easier for Bitcoin and Ethereum to purchase goods and services. As part of the Crypto Credit Card Initiative, Visa has formed approximately 60 partnerships with crypto trading platforms such as FTX, BlockFi, Coinbase, and Binance over the past year or so.
Image: Exclusive encrypted credit card launched by Visa in partnership with Binance
In addition, Visa is attracted to NFTs. In August 2021, Visa purchased CryptoPunk #7610 for approximately $150,000. Cuy Sheffield, head of Visa's crypto business, said that in August 2021 alone, the volume of NFT transactions on OpenSea reached about $1 billion, but its trading volume for the whole of 2020 was less than $100 million, so NFTs are rapidly developing and have full potential in all areas of culture and business.
transformation
Square（Block）
Square started out as a traditional payment processor, but the company's business has increasingly shifted to blockchain and Bitcoin. In December 2021, Square, led by former Twitter CEO Jack Dorsey, announced that it would change the company's legal name to Block, and as the name suggests, blockchain is one of the reasons for the name change.
Currently, Block spans multiple businesses, including its payments app Cash App, crypto research unit, Tidal Music Service, and its decentralized Bitcoin exchange TBD.
It is worth mentioning that the company has also made a large investment in Bitcoin, with more than 8,000 Bitcoins.
Gamestop
GameStop is an American retailer of video games, electronics and gaming goods. In early 2021, after retail traders on Reddit co-orchestrated a bearish confrontation, its stock price soared from $20 to more than $400, thus becoming the focus of the world's attention.
Since GameStop overhauled its executive team and board of directors, the company has turned a profit, and at its earnings conference in late 2021, the CEO said that it is vigorously exploring business opportunities involving blockchain and NFT technologies. Currently, GameStop employs more than 20 people to focus on the NFT market and plans to work with other game developers to list a variety of NFTs on its platform, from game costumes to weapons.
Image: GameStop builds the NFT platform
Phosus
Phosus is an AI expert in graphic entertainment. The AI-driven image enhancement tools it developed are widely used. At present, the company has officially entered the crypto industry, focusing on the field of NFT and blockchain games.
Samurai Doge, which has gained much attention on Twitter, is the company's work. Thanks to its technical superiority in images, Samurai Doge released 5,000 unique 3D NFTs. Each NFT comes with beautiful backgrounds, beautifully crafted armor, cool weapons and flags, and some even cute accessories and decorations. These 3D NFTs could eventually be used in an augmented reality (AR) application. Second, users can also try adapting metadata (i.e., features of these NFTs) as long as they are compatible.
The company is working on a "Play-to-Earn" game similar to Axie Infinity, which will have multiple modes such as PvP, PvE, PvNFT, and NFT as a character for the player to control. According to the company's email return visit, this game does not require rare 3D NFTs, players only need a normal 2D NFT to participate. The company's ultimate goal is to gradually build a gaming ecosystem around samurai doge NFTs, which is expected to take its place in the NFT community.
cooperate
There are also a lot of traditional companies working with crypto companies in 2021. For example, Turkey's electric vehicle (EV) manufacturer Togg announced a strategic partnership with Ava Labs to design and build smart contract-based services aimed at improving autonomous mobility.
Bitcoin futures ETFs are approved for listing
Many are hoping to be the first year of Bitcoin exchange-traded funds (ETFs) in 2021, and in some ways it has indeed done so. Although the crypto industry failed to successfully advance spot Bitcoin ETFs through the SEC in 2021, it passed several ETFs based on futures products.
Fast forward to August, at an event, SEC Chairman Gary Gensler commented on the Bitcoin ETF: Given the investment firm law, the federal securities law, and other important protections, I very much look forward to the staff reviewing the application for the bitcoin futures ETF, especially if these applications are limited to bitcoin futures traded on the CME (Chicago Mercantile Exchange).
From this moment on, the race began, and many companies began applying for futures-based Bitcoin ETFs.
ProShares' Bitcoin futures ETF, which was listed on the New York Stock Exchange on October 18, traded more than $1 billion on the day, ranking second in the highest-volume ETFs in history on the first day, well above expectations. It was followed by Valkyrie and VanEck's Bitcoin futures ETF.
Image: The ProShares Bitcoin Futures ETF is the second highest volume on the first day
However, with vanEck and Kryptoin's Bitcoin spot ETF rejected, 2021 ends. While there was no Bitcoin spot ETF that many would have liked this year, it did create tremendous momentum for the conversation around Bitcoin ETFs in 2022.
summary
We can accurately describe the beginning of the crypto market with "product innovation", which spawned some eye-catching applications such as DeFi, NFTs, and blockchain games. Blockchain can also bring innovation to a wider range of industries, from tracking container routing to improving the integrity of medical records. The "mainstreaming" of blockchain applications and crypto assets marks the next stage of the technology.
What does mainstream really mean? To quote a quote from the English dictionary Vocabulary, it is: "It describes what most people in society think of as 'normal.'" Mainstream is universal. ”
An important challenge remains on the path to mainstreaming in the crypto industry, namely a credible, global regulatory framework, and once these challenges are overcome, the glorious era of the crypto industry will come.
As we officially enter the new year, do you think the mass adoption of crypto will accelerate?