What’s shaping the future of the institutional crypto market?
2021 was a big year for cryptocurrency. El Salvador became the first country to adopt Bitcoin (BTC) as legal tender. In November 2021, the price of Bitcoin hit an all-time high approaching the psychologically significant mark of $70,000. And, all along the way, industry influencers like Elon Musk have been tweeting their enthusiasm about cryptocurrency more broadly.
I anticipate 2022 will continue to be an even bigger year for digital currencies as the market grows to reach 1 billion people. Here are the five most prominent trends that I see on the horizon for the year to come.
2022 will be a year in which institutional and retail cryptocurrency adoption, and trading in particular, will continue to grow. Fintech stalwarts PayPal and Square — along with mobile stock-trading platform Robinhood — have all made it easier to buy, sell and trade crypto. And public companies like MicroStrategy, Tesla, Galaxy and Square all added significant amounts of Bitcoin to their balance sheets in 2021.
What’s driving this growth? Aside from upward general momentum, two pieces of evidence reflect the ongoing maturity of the institutional crypto market: market cap and infrastructure.
In 2015, the total crypto market cap was around $5 billion. As of December 2021, it’s grown enormously to above $2 trillion. Bitcoin’s market cap alone was $3.6 billion on Jan. 4, 2015, and its current market cap is around $900 billion. Even the market cap of number two crypto, Ether (ETH), which has a bigger ecosystem of enterprise applications, is around $400 billion, which is close to Visa or JP Morgan Chase.
Even five years ago, core infrastructure was much less developed in crypto. Institutions were struggling to understand how to custody, trade and clear and
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