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2022 Crypto Trends: What do executives such as the founder of FTX, the CEO of Circle, and the former OCC head say?

2021/12/26

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As 2021 comes to a close, the cryptocurrency industry has seen many milestones this year, such as El Salvador declaring Bitcoin as "legal tender" in the country, the SEC approving the issuance of Bitcoin futures ETF, and NFTs entering the mainstream. Facing the unknowns of 2022, foreign media CNBC has compiled the industry leaders' views on trends:

The crypto market has had a wild year. Bitcoin has surged from $33,000 in January to $50,000, a 50% increase. Apart from prices, the crypto industry has also achieved many significant milestones: institutions adopting Bitcoin as a reserve asset, El Salvador recognizing Bitcoin as legal tender, and SEC approving Bitcoin futures ETF.

Discussions about the crypto industry have expanded beyond cryptocurrencies to new topics such as the metaverse, NFTs, Web3, which are also the trends that industry leaders are concerned about. However, as the crypto industry moves towards mainstream business, regulation has become the biggest variable.

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Looking ahead to the trends in 2022, here are the most influential industry leaders' statements:

FTX Founder Sam Bankman-Fried

Sam Bankman-Fried, who was recently invited to testify before the House Financial Services Committee, believes that while regulatory attention on cryptocurrencies is increasing globally, compliance in the crypto space will not be immediately clear. The legislative process in congress is lengthy, and regulatory authorities need to clarify their responsibilities.

However, SBF believes that over time, regulatory compliance may become clearer. This framework is slowly being pieced together through a series of statements, enforcement standards, and other indicators creating a "safe harbor."

Additionally, SBF sees potential for the Solana blockchain to replace Ethereum, but there may also be new emerging layer-one chains, with blockchains capable of processing 1 million transactions per second (TPS) becoming the new holy grail. Interestingly, Solana is moving towards achieving a million TPS, currently peaking at around 400,000 TPS.

"In the coming years, there will be substantial progress in crypto regulation. Most banks have reached internal consensus on entering the crypto ecosystem, but the timing and specifics depend on regulatory frameworks.

Furthermore, there are still significant concerns around stablecoins among regulators. However, this can be easily addressed as long as issuers provide proof or undergo audits by regulatory bodies.

Users' primary concern remains the stability of stablecoin prices. Once this is resolved, it will address most issues concerning user protection and systemic risks. Similarly, this is not difficult to achieve, so I remain optimistic about stablecoin regulation."

Circle CEO Jeremy Allaire

When it comes to stablecoins, the issuer of the stablecoin USDC, Circle, cannot be overlooked.

Circle CEO Jeremy Allaire is advocating for more e-commerce companies, financial institutions, and end consumers to use stablecoins pegged to the US dollar. Additionally, Jeremy Allaire hopes to see more institutions and celebrities leveraging NFTs to enhance their brands, which will increase the adoption of cryptocurrencies. Moreover, DAOs could become another crowdfunding method in the future.

"Even in a Fed tightening environment, investors and companies will seek opportunities to invest in digital assets to enhance returns. Therefore, I expect to see institutions adopting digital assets in the future through ETFs or customized yield products.

Both parties (Democrats and Republicans) acknowledge that blockchain and crypto technology are a competitive advantage for the United States, especially in a well-regulated environment, where this advantage will be quite evident. Therefore, I believe legislation will proceed faster than many anticipate.

By 2020, the application of stablecoins will continue to rise. We believe that the US dollar circulating online will soon become as widely used as email."

Bitfury CEO and Former OCC Head Brian Brooks

Bitfury CEO and former Office of the Comptroller of the Currency (OCC) head Brian Brooks stated that Washington lawmakers have reached a consensus that cryptocurrencies will continue to exist in the market. Therefore, he expects more significant funding and mainstream understanding of cryptocurrencies in 2022, clarifying many misconceptions, such as not all cryptocurrencies being money and not operating like traditional currency.

"The trend of end users adopting cryptocurrencies is accelerating. So for Wall Street firms that have not yet entered the crypto ecosystem, it's not a question of whether to enter but when to enter.

We need clear regulatory actions to create a viable, sustainable regulatory framework that enables continued development of crypto technology and Web3 in the United States."

Paxos CEO Charles Cascarilla

Paxos, the issuer of the stablecoin USDP and the technology provider behind PayPal's crypto products, also anticipates continued growth in the stablecoin market in 2022. CEO Charles Cascarilla warns that if regulatory direction goes awry, the U.S. could lose its leadership position in the crypto space.

"2022 will be the year of stablecoins. For the first time this year, users have stablecoin options for payments. Money is a product that updates based on people's lifestyles, and regulated stablecoins like USDP are the answer.

Clear, consistent, and definitive regulation will drive blockchain technology innovation in the United States. If we get it right, this technology will solidify America's dominant position in the long run. However, if we get it wrong, there will be many risks."

Grayscale CEO Michael Sonnenshein

Grayscale, the issuer of the world's largest Bitcoin trust fund (GBTC), has been a primary entry point for many funds before the appearance of Bitcoin futures ETFs. Currently, Grayscale is seeking to convert its GBTC product into a "Bitcoin ETF."

Grayscale CEO Michael Sonnenshein is optimistic about this move, believing that in 2022, U.S. regulatory agencies are likely to approve a Bitcoin ETF. He also notes the tension between "tech companies" and "decentralized platforms."

"We will enter 2022 without a Bitcoin (spot) ETF, but I believe the SEC and other regulatory agencies will continue to study the issue next year. We optimistically believe that a Bitcoin ETF will create a level playing field, providing investors with a gateway to invest in cryptocurrencies.

Due to competition in social media and e-commerce, the relationship between major tech companies and decentralized platforms may become more tense."

Robinhood COO and Crypto Lead Christine Brown

Robinhood, a global stock trading platform now listed in the U.S., derived half of its Q2 revenue this year from cryptocurrency trading, with Dogecoin (DOGE) accounting for 60% of the volume. Christine Brown stated that cryptocurrency assets are becoming increasingly important for the company's growth, but they will proceed cautiously until regulatory issues are clear, gradually adding more cryptocurrency trading pairs.

"2021 was a year when cryptocurrencies rose to the mainstream. Whether through NFTs or cryptocurrencies, more people will participate in the crypto space in 2022.

Traditionally, HODL has been the culture of the crypto community. In 2021, cryptocurrencies expanded to NFTs, turning JPEG images into Twitter profile pictures for crypto users. In 2022, the industry will focus more on design and user experience, making the transition from Web2 to Web3 smoother. We also expect to see more mainstream brands getting involved."

Pomp Investments Head Anthony Pompliano

Anthony Pompliano, with over a million followers on Twitter, is known for his bullish stance on Bitcoin. He believes that in 2021, cryptocurrencies became the "Wall Street consensus." He expects more traditional companies to include Bitcoin on their balance sheets in 2022 and even anticipates the establishment of dedicated cryptocurrency business units.

Furthermore, Pompliano emphasizes Bitcoin's potential in payments and the migration of talent from Wall Street and tech giants to the crypto industry.

"In 2021, Bitcoin mining shifted from being dominated by China to being led by the U.S. The U.S. market continues to grow, and it wouldn't surprise me if Bitcoin's hash rate hits a new high in 2022.

In 2021, the leading social media platform Twitter enabled Bitcoin Lightning Network payments through integration with Strike (a company I'm an investor in). El Salvador also adopted Lightning Network payments, and we expect more of the top 500 companies to adopt Lightning Network payments in 2022."

Gemini COO Noah Perlman

Gemini, founded by twins Tyler Winklevoss and Cameron Winklevoss, is a cryptocurrency exchange valued at around $7 billion. Gemini believes that a Bitcoin ETF will be officially approved in 2022 and is currently developing a Bitcoin ETF application. COO Noah Perlman predicts that cryptocurrency payments will become mainstream in 2022, more non-tech companies will embrace the metaverse, and there will be increased female participation in the crypto market.

"More retail companies will expand cryptocurrency payments, offering digital currencies as a payment method. Credit card companies providing crypto rewards will become more common, making using cryptocurrency for payments as easy as using a credit card is today.

It may not be surprising to see major tech giants like Apple, Meta, Snap, Alphabet, and Microsoft establish metaverse ecosystems. However, we expect more industries to join this trend, just as Nike acquired RTFKT and Adidas launched NFTs.

On the other hand, the typical image of crypto investors has been males in their 30s with an annual income of $100,000. However, this structure has begun to change over the past year. According to Gemini's report, 63% of adults are curious about cryptocurrency, showing a strong interest although they do not currently own cryptocurrency."