Top Cryptocurrency Trends For 2022-2025
Updated: Feb 21, 2022
The cryptocurrency world took off last year.
The total market capitalization of all cryptocurrencies now exceeds $1.6 trillion.
And it’s estimated that there are over 300 million crypto users worldwide.
In this new report we'll share the biggest trends in the crypto space happening right now (in 2022). And those that are likely to continue through 2025 and beyond.
1. Institutional Adoption Of The Crypto Ecosystem
Financial institutions and large corporations have traditionally viewed the cryptocurrency ecosystem with skepticism.
Today, many institutions are actively allocating capital to this area.
Nowhere has this become more apparent than the asset management industry.
By the end of 2020, $15 billion of institutional assets under management had been allocated to the crypto asset class.
After years of hand wringing, large scale funds are going all-in with crypto.
This is compared to just over $2 billion at the end of 2019 (a 5x increase).
In addition, the Grayscale Bitcoin Trust (the only way for many institutions to obtain bitcoin exposure) saw assets increase by 900% in 2020.
The Grayscale Bitcoin Trust has seen search interest increase by 200% over the last five years.
While this amount is still peanuts compared to the overall asset management industry, future regulatory clarity could help in bolstering this number.
(More on that later.)
Until then, companies like MassMutual are helping to ease the transition.
The 169-year old insurer invested $100 million into bitcoin in 2020.
MassMutual made headlines by putting $100M of their funds into BTC.
In addition, Square and MicroStrategy somewhat shocked the business world by placing portions of their cash reserves in bitcoin.
One major reason for this change?
Large financial gatekeepers are making it easier for consumers to transact in cryptocurrencies.
Paypal and its subsidiary Venmo both enabled crypto trading on their platforms last year.
PayPal data showed that users who bought crypto on the Paypal app logged in twice as much as they did before Paypal allowed such transactions.
Further, the Chicago Mercantile Exchange (CME) introduced Micro Ether future contracts in December 2021.
Coindesk has also noted that the number of "bitcoin whales" (addresses that own over 1,000 bitcoin) has been increasing rapidly since the end of 2020.
2. DeFi Powers More Use Cases
Almost nothing has drawn more attention in the crypto community last year than the advent of DeFi (Decentralized Finance) applications.
Search interest in "Decentralized Finance" has risen by 5,600% since 2017.
The concept basically involves traditional financial transactions that take place on the blockchain.
These transactions are typically enabled by the use of smart contracts.
And, unlike traditional payments or transfers, they avoid the need for financial intermediaries altogether.
DeFi transactions usually range from traditional lending to the creation of derivatives.
And growth in the DeFi space is only just beginning.
DeFi Pulse reports that the Total Value Locked (TVL) – a measure of the total value of cryptocurrencies that are committed to a smart DeFi contract – grew from $2 billion to $15 billion in 2020.
And 2021 has brought unprecedented growth. Since the beginning of last year, the TVL more than doubled to just under $100 billion.
One of the most popular recent DeFi applications has been yield farming.
Yield farming involves lending crypto assets to other platforms in return for interest or new cryptocurrencies.
Searches for "yield farming" have grown by 942% over the last five years.
On the surface, yield farming very is similar to digital banking.
Users deposit their crypto assets in a pool of funds and receive interest on those assets.
In many cases the depositor is staking a new crypto platform.
And will receive a new crypto asset in return for the liquidity he or she provides.
In our low interest rate environment, yield farming platforms have received notable attention because of the higher rates they can offer to depositors.
Compound is probably the largest yield farming DeFi platform.
Compound is a leading interest rate protocol.
It allows users to deposit cryptocurrencies into a pool, receiving in return a redeemable token that represents a stake in that pool.
Compound is basically acting as a central clearing house for crypto-based lending.
The total amount supplied on the platform is currently over $10 billion. And the total amount borrowed is at roughly $4 billion.
In addition, platforms like Crypto.com are meshing the worlds of traditional finance services and DeFi.
Searches for "Crypto.com" have increased by 6,400% over the last five years.
The platform allows users to place cryptocurrencies in a digital wallet, exchange cryptocurrencies, yield farm, and seamlessly pay with credit cards like Visa using cryptocurrencies that users have in their wallet.
Decentralized exchanges (DEXs) have also proven popular over the last year.
Search growth for the term "Decentralized exchange" has risen by 315% over the last 2 years.
DEXs allow crypto owners to transact directly, without the need for an intermediary.
They also give users complete ownership and control of their crypto assets.
Monthly trading volume on DEXs is rising rapidly.
January 2021’s monthly trading volume was $56 billion, an increase of over 1,000% from 2020’s high of $26 billion in September.
Monthly trading volume on DEXs since 2019.
The majority of the volume is captured by the two largest decentralized crypto exchanges: Uniswap and Sushiwap.
Uniswap is a decentralized trading protocal for Ethereum.
It provides liquidity to the large collection of DeFi applications that are native to the Ethereum blockchain.
With just over 50% of total trading volume for all DEX platforms, Uniswap is the undisputed market leader.
However, SushiSwap, a fork of the Uniswap DEX, is starting to encroach on the larger exchange’s territory.
SushiSwap exchange captured 23% of total monthly trading volume in January 2021.
Search interest in "SushiSwap" has increased by 87% over the last year.
What’s more impressive than its current position, however, is SushiSwap’s rapid growth.
Just last year, it held only 1.98% of the total DEX volume market share.
3. NFTs Tokenize Everything
One of the most interesting developments in the crypto space is the rise of non-fungible tokens (NFTs).