Venture capital firms' five major predictions for 2022! Stablecoin supply reaches 500 billion, more financial institutions offer crypto products

Venture capital firm Jump Capital partner Peter Johnson announced his five major predictions for the 2022 cryptocurrency industry yesterday. At the end of last year, he also made predictions for 2021, including Bitcoin reaching $50,000, the approval of a Bitcoin ETF in the United States, and the flourishing development of the DeFi industry. What are his predictions and explanations for this year?

Peter Johnson's Five Predictions

1. Stablecoins Leading Cryptocurrency Industry Growth, Supply Reaching $500 Billion

In 2020 and 2021, the adoption of stablecoins continued to grow without signs of slowing down. The total supply now exceeds $140 billion, with expectations that it will reach trillions of dollars in the future.

In 2022, the growth in stablecoin usage will not only come from trading and investment purposes as before, but mainly for cross-border payments and as a hedge asset for countries with unstable currency values. Additionally, USDC and UST will capture more market share from USDT, becoming dominant centralized and decentralized stablecoins in the market.

2. DAO and DAO Infrastructure Index will Experience Exponential Growth

DAOs can be used for various purposes, including managing operations and capital of blockchain projects like MakerDAO, managing investment capital like The LAO, managing in-game assets utility like YGG DAO, coordinating cultural groups like Friends With Benefits, or collaborative asset purchases like Constitution DAO.

Constitution DAO, like a watershed, raised $40 million from thousands of people and worked towards a common goal. However, this is just the beginning, and in 2022, there will be more DAO funding exceeding $100 million, focusing on more objectives. Furthermore, the governance design and infrastructure of DAOs will gradually mature for effective management of these DAOs.

3. High-Speed Chains, Layer 2 Networks, and Cross-Chain Applications Will See Wider Adoption

In 2021, more transactions migrated from Ethereum, and fast and low-cost blockchains like Solana, Terra, Avalanche, Layer 2 scaling solutions, and sidechains like Polygon will continue to grow more comprehensively in 2022.

Currently, the Layer 1 and Layer 2 blockchain ecosystems are quite isolated, but in 2022, cross-chain applications like Wormhole will make significant progress in seamless asset and information movement across blockchains.

4. Every Startup is a Crypto Company, Financial Institutions, Consultants, and Tech Companies Offering Crypto Products

The crypto industry will grow to an undeniable scale, where traditional financial industries cannot ignore, and 2022 will be the year they launch crypto products. Additionally, the proportion of options in derivative trading volume will significantly increase.

There is an increasing number of blockchain games in the market, but most lack good gameplay despite promoting Play-to-Earn (P2E). However, the concept of giving players true ownership of in-game assets will be the foundation of future games. It is expected that more traditional game studios will enter the crypto industry in 2022, launching games that combine the above concept with high playability.

Furthermore, over time, most companies will start adopting crypto technology in some way, such as by offering crypto products, using stablecoins as payment channels, supporting Web3 wallet logins, utilizing NFTs, or having communities integrated with token usage.

5. Venture Capital Investments in Crypto Startups on the Rise

The amount invested in crypto startups in the first nine months of 2021 was $15 billion, roughly five times that of the previous year. However, this amount only accounted for about 3% of total investments by venture capital firms.

Investments in 2022 are expected to increase sharply, with traditional venture capital firms allocating a larger proportion to native crypto projects and having more integration across industries.