Hardly anyone can disagree with the fact that 2021 was quite a year for the cryptocurrency market. First thing first, bitcoin crossed the $67,000 mark, while ether exceeded $4700. The reason for such staggering growth can be attributed to the popularization of digital currencies. Unfortunately, by the end of the year, the market lost some of the upward momentum.
On the one hand, this could be attributed to the fact that most investors moved to risk-off assets. On the other hand, there is an assumption that cryptonians are scared of the regulatory risks the industry may face. From a personal perspective, I believe that traders are simply trying to reduce taxable income by selling coins at a loss.
The good news is that the industry continues to grow and gain momentum. According to the DappRadar Industry Report, NFT token trading volume has exceeded $23 billion in the past 12 months. The total value of DeFi blocked in applications, in turn, has grown by more than 700% since 2020, topping $200 billion. Who knows, maybe one day, DeFi will replace the traditional technology of the current financial system.
Another historic event for the cryptocurrency market was the adoption of the first-ever exchange-traded fund ETF based on bitcoin futures from the Chicago Mercantile Exchange. In a nutshell, the new product allows those wishing to deal in bitcoin without having to directly own it. Perhaps the SEC will also approve spot ETFs for BTC or ETH in the near future. Most likely, this will lead to a new surge of interest in cryptocurrencies.
It is also impossible not to mention that there is a new promising direction in the industry - the meta-universe. Despite the general hype, Elon Musk said that he does not see a future in which it would be necessary to leave the physical world to live in virtual reality and that it is more like marketing than real technology. Whether this is, in fact, the case or whether Iron Man is wrong, only time will tell.
What about the meta-universe coins? So far, the story looks pretty speculative, which means the risk of a correction is pretty high. As an alternative, one might consider a series of DeFi tokens. What is the probability of their growth? It all depends on market sentiment and the team's willingness to integrate new solutions.